₦airaland Forum

Tax policy becomes misleading when administrative thresholds are mistaken for living standards. Nigeria’s ₦800,000 tax exemption illustrates this problem: a figure that falls squarely within extreme poverty is being framed as economic relief - We are redefining poverty downward until survival itself looks like comfort.

By global and even basic local cost-of-living standards, ₦800,000 per year places a person firmly in extreme poverty. Presenting it as a meaningful protection threshold is misleading, and it risks normalizing deprivation rather than addressing it.

World Bank classifies extreme poverty and poverty (monetary/consumption-based) according to its global poverty measurement framework:

Under the World Bank poverty measurement framework, and using an approximate exchange rate of ₦1,450 per US dollar, the naira equivalents are as follows (figures are per person):

1. Extreme poverty (about $3 per day):

This corresponds to roughly ₦4,350 per day.
That is about ₦130,500 per month (30 days),
and approximately ₦1,587,750 per year.

2. Poverty – lower-middle-income country standard (about $4.20 per day):

This equals roughly ₦6,090 per day.
That comes to about ₦182,700 per month,
and roughly ₦2,223,850 per year.

Poverty – upper-middle-income country standard (about $8.30 per day):
This is about ₦12,035 per day.
That amounts to roughly ₦361,050 per month,
and approximately ₦4,394,775 per year.

Important clarifications:
These figures are approximations, because World Bank poverty lines are defined in PPP (purchasing power parity) dollars, not market exchange rates. Converting them directly to naira using the dollar rate helps illustration and policy discussion, but it does not perfectly reflect real local purchasing power in Nigeria, especially under high inflation and exchange-rate volatility.

DrMB:
Tax policy becomes misleading when administrative thresholds are mistaken for living standards. Nigeria’s ₦800,000 tax exemption illustrates this problem: a figure that falls squarely within extreme poverty is being framed as economic relief - We are redefining poverty downward until survival itself looks like comfort.

800k is for 9 to 5 workers, most smes won't pay tax if they don't make 5m per annum .

Tax should be paid if your annual income exceed 5m

From the very first day Tinubu became President, Nigeria became worst till this day.
Only his first speech threw the country into confusion.

benardtotti:
800k is for 9 to 5 workers, most smes won't pay tax if they don't make 5m per annum .

Revenue or profit?

mrvitalis:
Revenue or profit?

Revenue not profit oh !

They did it with subsidy removal, they have finished eating the excess they made. Now they are all over social media trying to confuse and bamboozle illiterate Nigerians into believing their lies.
What I am interested in is the prosecution of all the people involved in altering the new tax laws. They should be in jail.

When it is said this whole is fraud disguised as a popular social intervention to tax the rich to benefit the poor.

Said thing was said about removal of fuel subsidy. What happened? Electricity subsidy, educational subsidy and many others were removed. Then in place comes the neck-constricting taxations. Where have you ever seen the rich ready to sacrifice anything for the poor.

Another increase in the prices of goods and services loading .make una dey play

DrMB:
Tax policy becomes misleading when Nigeria’s ₦800,000 tax exemption falls squarely within extreme poverty.

Some Nigerians think it refers to 800k monthly, they need to understand that it is 800k annually. So if you are earning 70k or 80k and above monthly then you probably are going to be taxed. They also forgot that people earning 70k 80k 100k monthly fall within the poverty line.

I laff in kirikiri

Reposted from the thread:
No Tax If You Are Earning Below ₦800k Annually
https://www.nairaland.com/8591409/no-tax-earning-below-800k/3#137990000

DoTheNeedful:
Many of you that criticize do so either maliciously or due to ignorance.

Our tax collection rate in Nigeria is one of the poorest even in Africa. The understanding of tax by Nigerians terrible. Many of you need to get it into your heads that tax payment is vital for any society to thrive.

Many of you are also disingenious when you make it seem like Nigerians don't pay many indirect taxes. Some people think Nigerians do not pay tax, so they focus mainly on income tax, but this view is not correct and misleading.

When people buy goods and services, they pay Value Added Tax (VAT), fuel levies, customs duties on imported items, and other indirect taxes. These taxes are built into prices, so everyone pays them whether they are employed or not. The taxes you pay for your government's negligence on providing 24/7 electricity is huge. When government NEPA fails and you buy fuel for your generator, you are still paying tax. When you receive electricity bills with VAT and charges, you are paying tax.

Everyday Nigerians pay indirect taxes when they buy food and household items (VAT), buy fuel or take transport (fuel levies), make phone calls or use data (telecoms levies), buy imported goods - fashion wigs, cars, phones, or spare parts (customs and import duties), stay in hotels or eat at restaurants (consumption and hotel taxes), watch movies or attend events (entertainment tax), send money or sign agreements (stamp duties), pay rent or utility bills (environmental and waste levies), and even when transport fares rise because taxes are built into costs, all without being directly told they are paying tax. You pay for higher cost of food because the transportation cost already takes the taxes into delivery. If you have a shop, you pay market levies, these are all taxes. You pay LAWMA or PSP, read the fine print. Those touts that stop buses are collecting money. That money is tax! Anything due, levies, fees is tax. When you ask yourself where the money is going to, if it is going to government, even if it is collected by a consultant, it is TAX. The money you will pay for tinted permit is a tax. I attached an image here to show you how much those boys collect on the road and why MC Oluomo can be powerful. They are now saying that state governments should ban such collection of taxes on the road.


The government focuses more on income tax because it is easier to track formal workers and businesses under the Pay-As-You-Earn (PAYE) system. A large part of Nigeria’s economy is informal, making direct income tax collection difficult. As a result, indirect taxes often contribute significantly to government revenue, even though many people are unaware they are paying them.

In 2023, Nigeria collected about ₦3.64 trillion in VAT (indirect tax ≈ 43%) and ₦4.89 trillion in company income tax (direct tax ≈ 57%), based on NBS-reported figures.

Aba Women's Riot of 1929: A Turning Point

https://www.youtube.com/watch?v=ddDdh1sxztw



The Aba Women’s Riot of 1929 happened mainly because of unfair taxes and the extension of colonial authority over women. The British tried to impose direct taxes and give warrant chiefs more control, but market women in Aba protested since they had no voice in government decisions. Tens of thousands of women joined strikes and demonstrations, even attacking colonial offices, to resist being taxed and controlled unfairly. The revolt forced the British to rethink taxation and local administration, making it a turning point in Nigeria’s colonial history and showing the strength of women’s collective action.


The people are very comfortable with corruption. In the UK and US, politicians who raise taxes can lose elections because voters hold them accountable, but in Nigeria, taxes are 🇳🇬

I just need to break this down here because what you don't understand you will keep being misled.

A tax is money the government collects from people, businesses, or things you buy, to pay for public services like roads, schools, hospitals, and electricity.

Many Nigerians think only people with salaries pay tax because income tax (PAYE) is very visible, it comes straight off your paycheck. But in reality, everyone pays indirect taxes whenever they buy goods, fuel, food, use electricity, phone, or travel. The “hypocrisy” comes from the fact that government talks about income tax more because it’s easy to track, while indirect taxes are hidden in prices, so it feels like the poor or informal workers aren’t paying anything when they actually are.

What annoys me is the japa people that go abroad and yap about taxes. They want Nigeria to have the same western style. If you play with taxes abroad, you'll be shown the way out in the next election and you should also understand the white man and why he does things in a way. When you understand their history, you'll know why we are not the same.

Some countries really do not charge personal income tax at all meaning residents don’t file annual income tax returns like in the UK/US and don’t pay tax on their salaries. Examples include United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, Bahamas, Cayman Islands, Monaco, Brunei and Vanuatu, among others. These countries still get money for government services through oil, trade, fees, or other taxes, not by taxing individual salaries. Do the maths and tell me one thing in common Nigeria has that some of these countries have. These countries fund government spending through other sources such as oil and gas revenues, corporate taxes, import duties, fees, tourism income or VAT/sales taxes, instead of taxing people’s income directly.

You need to get off this obsession with the west and trying to be like who you are not. This is the miseducation of the average African. Don't forget that in Aba and Ogun State, Women fought the imposition of taxes by the British. Many Nigerians don't even study their history. You should go and read why they didn't want the colonial government collecting taxes from them.


Historically, Western heavy taxation grew partly from scarcity and because they needed money to fund armies, wars, infrastructure, and administrative systems. Land and resources were limited, populations were growing, and scarcity of money made taxes necessary. Scarcity also came from their harsh climates, poor harvests, and limited technology, so the state had to extract more from people to survive and provide basic service, sunlike in some African systems, where wealth was shared communally rather than extracted as formal taxes. When you look at it today, the concept of Black Tax is because in Africa, we share the resources with the rest of us Ubuntu style. Despite formal systems of managing your money, there is the communal part of Africa that wants to share. We are not capitalists by nature where a few hoard money or some people cut off their families. Learn why things are the way they are. Today, I see people teaching financial wealth and I laugh when they want us to copy westerners and their form of selfish indiduvual finance.


The day Nigerians wake up to know their rights and why the government cannot just squander their money, they will wake up.

Black Tax in Africa: History, Resistance, and Contemporary Relevance

Black Tax is a social and economic practice in which individuals who earn income support their extended family and community. While it is often framed today as a modern burden on African professionals, its roots run deep, connecting pre-colonial communal practices, colonial disruption, and contemporary economic realities.

Across Africa, long before the imposition of European-style taxes, societies operated through systems of kinship, clan, and village networks. Wealth was rarely considered purely individual; instead, it was shared among relatives and community members to ensure survival, security, and collective prosperity. Success was measured not only by personal gain but also by one’s contribution to the well-being of the group. This system, widespread across West, East, Central, and Southern Africa, established a moral and social framework in which supporting one’s family was a non-negotiable duty.

Colonialism disrupted these systems but did not erase them. European powers introduced cash-based taxes such as hut taxes, head taxes, and poll taxes to fund colonial administration and force Africans into wage labor. These taxes were alien to pre-colonial societies, coercive in nature, and often exploitative. In Nigeria, for example, the Aba Women’s Riot of 1929 arose partly in response to colonial taxation policies, while in Ghana, the Ashanti resisted head taxes imposed by the British. Africans saw these taxes as extractive, disconnected from communal ethics, and in many cases, damaging to survival. At the same time, traditional kinship support networks became even more critical, as families sought to survive the dislocations caused by forced labor, land seizures, and migration. Black Tax, in this context, was not merely cultural, it was an essential parallel system of social and economic support that sustained families where the colonial state failed.

After independence, many African governments retained formal tax systems modeled on Western frameworks. Modern statutory taxes, while intended to fund public services, often fail to meet the population’s needs due to corruption, weak administration, and structural economic inequality. In contrast, Black Tax remains a morally and socially enforced obligation, deeply embedded in the expectation that success entails responsibility to one’s family. For many Africans, paying Black Tax is more tangible and meaningful than paying statutory taxes, because it directly supports those dependent on the individual, unlike state-collected taxes, which may not translate into reliable public goods.

The persistence of Black Tax is further reinforced by the African diaspora experience. Enslavement, segregation, and structural exclusion in the Caribbean, the Americas, and Europe disrupted traditional safety nets, forcing Africans and their descendants to create alternative support systems. Those who gained income or resources became anchors for their families and communities, extending Black Tax across borders and generations. Today, remittances from diaspora communities remain a crucial lifeline for millions of African households, reflecting continuity of the practice across time and space.

Black Tax endures because it is not merely a cultural preference, it is historically rooted, socially reinforced, and economically necessary. Its longevity reflects pre-colonial communal ethics, the failure of colonial and post-colonial governments to provide comprehensive social welfare, and ongoing economic inequalities. Unlike statutory taxes, which were imposed top-down and often feel alien or extractive, Black Tax arises bottom-up as a moral, social, and economic duty. For Africans, it is a practice that links personal success to collective survival, reinforcing family and community bonds in ways that formal fiscal systems cannot.

Black Tax is a product of African social philosophy, historical necessity, and the realities of governance. It highlights the enduring tension between formal, alien tax systems and indigenous communal obligations. While modern taxes are important for building public infrastructure, Black Tax persists because it is immediate, relational, and life-sustaining, a reflection of centuries of African communal ethics, colonial disruption, and the ongoing struggle for economic and social survival...

Today, many Africans are complaining about Black Taxes and they say it's holding you down. I am not in support of entitled relatives, cheating and exploitation but what I see is that Africans have helped the colonialist with what they want. We have not sat down to find out why we had systems and why we behave in certain ways, we only want to be like other people but ourselves. We don't even know our own philosophy as Africans and what makes us different. If we only sat down to understand who we are, then everyone in the family will understand their roles. Africans are confused today because they don't know themselves, that's why they are exploiting themselves and everyone is cheating the other. Abi why black tax still de popular till date across Africa and Carribean


https://www.youtube.com/watch?v=sBQp0OhuAC8


https://www.youtube.com/watch?v=CvB9ANbev7g


https://www.youtube.com/watch?v=TTMY_q_4m2o

benardtotti:
Revenue not profit oh !

So what do you think is the profit on 5 million revenue per year?

its the poor that are even defending him vehemently

Tax the rich heavily and spare the poor this way the poor would think it doesn't affect them.

The rich in turn increases prices of goods and services and the poor would bear the consequences of the taxes.

In other words 800k is now the new benchmark for rich Nigerian.

In other words 800k anually is now the new benchmark for rich Nigerian.

You cannot tax a salary system that does not exist.
Nigeria has no structured income, no stable jobs, no insurance, no refunds, no social security, no safety net. People earn probabilistically, not monthly. Many make ₦800k+ a year and still end in debt because half goes to transport and survival.
Taxing account inflow or turnover is not taxing income — it is taxing movement.
In countries you are copying, tax works because income is stable and the state gives something back.
Here, there is no stability, no protection, no benefit.
You are not taxing wealth — you are taxing struggle.

ogaemma:
From the very first day Tinubu became President, Nigeria became worst till this day.
Only his first speech threw the country into confusion.

Nigerians collecting back to back

89green:
Some Nigerians think it refers to 800k monthly, they need to understand that it is 800k annually. So if you are earning 70k or 80k and above monthly then you probably are going to be taxed. They also forgot that people earning 70k 80k 100k monthly fall within the poverty line.

I laff in kirikiri

God bless you for that almost honest post ,sir.
The poor will generally be exempt from tax.
The law explicitly exempts individuals earning ₦800,000 or less per annum from paying personal income tax.

Allowable Deductions:
For an individual earning exactly ₦840,000 per year, their gross income is slightly above the ₦800,000 exemption threshold. However, mandatory and other allowable deductions can be made to lower their taxable income.
Allowable deductions include:
Pension contributions (8% of salary)
National Housing Fund (NHF) contribution (2.5% of gross pay)
National Health Insurance Scheme (NHIS) contribution (5% of basic salary)
Approved life insurance premiums
A rent relief (20% of annual rent, capped at ₦500,000).

Practical Application:
When these deductions are applied, the actual taxable income for a minimum wage earner often falls below the ₦800,000 threshold, resulting in zero income tax liability. For example, after typical deductions, an individual earning ₦70,000 monthly might have a taxable income around ₦710,800 annually, which is exempt.
In essence, the policy aims to protect low-income earners from the tax burden, in line with President Tinubu's administration goals to ensure that the poor are not taxed.

Do you know that, what the new tax law mean is that, if you are receiving minimum wage, you must pay tax?