Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made this clear in a now-viral video from a tax education session organised by the Redeemed Christian Church of God (RCCG), City of David, Lagos.
Explaining the distinction, Oyedele noted that upkeep money or allowances given to dependants and relatives do not fall under taxable income, as such transfers are “non-exchange transactions.”
“You earn a certain amount of money and you have to send upkeep to your cousin, your brother, even a stranger, it doesn’t really matter,” he said. “If the amount you’re sending to someone is money you are giving them as a gift, that’s not taxable. It is you that should have paid tax before giving them a gift.”
However, he stressed that once payment is made for a service or product, tax becomes unavoidable. In his words:
“If somebody is doing runs girls, right, they go and look for men to sleep with, you know that’s a service, they will pay tax on it. One thing about the tax law is it does not separate between whether what you are doing is legitimate or not. It just asks you whether you have an income. Did you get it from rendering a service or providing a good? You pay tax.”
Oyedele urged Nigerians to look beyond sound bites and focus on the broader context of the sweeping reforms, which he described
as the most far-reaching in Nigeria’s history.“The starting point for me is always to give context. And the first message, is a proverbial blind man and an elephant. Depending on the side of the elephant that they touched, they concluded what it was—maybe a fan, a wall, or a tree. But none of them got the right answer because they didn’t feel the big picture,” he said.
He warned that focusing on only one controversial aspect of the reforms could lead to misunderstanding, adding: “One thing I can tell you is that the tax reforms enacted into law a few months ago, that will take effect from January next year, is the most transformative, most significant in our nation’s history. With over 200 significant changes and more than 400 pages combined, it is very easy and could be tempting to narrow it down to one issue. That would be making the same mistake as the blind man and the elephant.”
The reforms, according to him, will impact individuals, employees, employers, business owners and civil servants, aiming to simplify the tax system and boost compliance.
Under the new regime, which takes effect from 1 January 2026, Nigerians earning below ₦800,000 annually will be exempt from personal income tax. Similarly, companies with turnover of up to ₦100 million and assets not exceeding ₦250 million will enjoy exemption from company income tax, capital gains tax, and the new development levy.
The Federal Government says the new system consolidates existing tax statutes into one streamlined framework, ending the era of multiple taxation disputes.
