are likely to see an increase in take-home pay due to reduced taxes, while those earning above N25m would face higher tax obligations and reduced net income. He added that organisations would need to consider how to manage this differential from a human capital perspective.
“Staff earning below N25m will retain the benefit, and that cannot be clawed back. However, for staff earning above N25m, the question becomes whether the company will absorb part of the increased tax burden through a payroll review aligned with this change,” he said, stressing that payroll adjustments are an urgent issue that organisations must address immediately.
Developmental economist Dr Aliyu Ilias said the policy was initially presented as progressive, but early implementation suggests otherwise.
“Recent developments particularly charges applied to USSD transactions and other bank services show that a 7.5 per cent levy is being imposed across multiple layers,” Ilias told The PUNCH.
“This suggests that the policy may, in fact, negatively affect people. Individuals who adjusted their spending in anticipation of reduced costs are now facing higher charges, which could strain household finances and weaken purchasing power.”
The reforms were not without controversy. Lawmakers had raised concerns over discrepancies between gazetted and parliamentary versions of the laws, prompting official clarifications and certified publications. Despite these concerns, the government pressed ahead, stressing that the measures are essential to enhance disposable income and reduce bureaucratic inefficiencies in tax collection.
Describing the situation as “an unfortunate reality,” Ilias said the National Assembly could amend the framework to address emerging distortions.
“If we examine the current trajectory, we can identify specific issues that require further review,” he added, urging policymakers to monitor challenges as implementation continues. “Overall, however, we believe we are doing good work.”
