By Majeed Salaam
In a move aimed at easing the tax burden on the majority of Nigerians, the Executive Chairman of Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji, recently said that only five percent of Nigerians would pay tax under the new system set to debut in January 2026.
Speaking shortly after receiving an award from the University of Ilorin Alumni Association, Dr Adedeji said that the reform is designed to target high-income earners, leaving the bulk of Nigerians free from taxation. “The focus will be on those at the top of the pyramid,” he said, stressing that the system will be fair and business-friendly.
Represented by Prof Abiola Sanni, Dr Adedeji revealed that the FIRS itself would undergo a name change next year. “From January 2026, FIRS will have a new name. This is not just a cosmetic change. We are looking to address our revenue challenges and improve our tax-to- gross domestic product (GDP) ratio with fresh approaches to taxation,” he explained.
The FIRS boss emphasised that past tax systems disproportionately affected lower-income earners and workers in the informal sector. The new system, he said, shifts the burden to wealthier individuals and businesses who have historically contributed less than their fair share. “In some countries, the tax rate can reach 50 percent. In Nigeria, after deductions, high earners will pay only 25 percent of their income. This is a necessary step to fund infrastructure, education, and other critical national needs,” Dr Adedeji said.
He also hinted at the establishment of a new tax institute, highlighting that the reform is more than a rebranding exercise. “The changes signal that FIRS is no longer just a federal institution. We are setting the stage for a system that is transformative, fair, and capable of supporting national development,” he stated.
Dr Adedeji’s revelation comes amid ongoing efforts to improve tax compliance and generate sustainable revenue for government projects. The reforms mark one of the most significant overhauls of Nigeria’s tax system in recent history.
