Some workers have expressed mixed and largely underwhelming reactions to recent changes in their take-home pay following the implementation of new Personal Income Tax reforms, with many stating that the increases are marginal and insufficient to meaningfully alleviate economic pressures.

The new tax reform laws introduce several adjustments to the PIT regime. Individuals earning the national minimum wage or less are now exempt from personal income tax, while employees with an annual gross income of up to N1.2m, equivalent to about N800,000 in taxable income, are also exempt. The reforms further provide for reduced Pay-As-You-Earn tax for those earning up to N20m annually and exempt gifts from taxation.

Despite these changes, several workers told The PUNCH on Monday that the impact on their salaries has been modest. A banker, Adetunji Morgan, said his salary rose by about N5,000 following the adjustment. “Yes, the salary increased. I think it increased by about N5,000 for me,” he said.

A Lagos State civil servant, Adedayo Lawal, said it was difficult to determine the exact effect of the PAYE reduction on his earnings without reviewing his payslip. He explained that a Yuletide allowance paid in December further complicated the assessment. “We were given a Yuletide allowance in December, but only 50 per cent of it was paid, with a promise that the second part would be paid this month,” he said, adding that he was not expecting a significant increase.

Similarly, Tolulope Ifeanyi, an employee in the financial services sector, described the increment as minimal. “Mine increased, oh, just a little, sha,” she said.

For a media practitioner, Joshua Austin, the increase was symbolic rather than impactful. “My salary increased, but it is not enough to buy me shawarma for one evening,” he said, noting that a wrap of his preferred shawarma costs N2,500. “As for an increase, yes, it increased, but what is the value of the increase?”

A verified X user, Gabriel Bolatito, also acknowledged the marginal change, stating that while the reduction in PAYE was small, it aligned with prior expectations and resulted in a slight net increase.

“I received my salary last week, and my take-home pay is slightly higher than before. It’s not a huge change, but it helps cover some of the rising costs of living,” said Uchechi Nwankamma, a contract staff at Access Bank in Lagos earning between N200,000 and N250,000 monthly.

From a cross-section of employees interviewed by The PUNCH across the public and private sectors, salary increments reportedly ranged from N6,000 and N5,000 to as low as N3,000, N1,443 and even N400.

Reacting to the feedback, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the committee had received confirmations from workers who noticed reductions in their PAYE tax. In a post on his X (formerly Twitter) handle on Monday, Oyedele wrote, “We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax, resulting in higher take-home pay under the new tax laws.”

He added that the committee, in collaboration with the Joint Revenue Board, would host an engagement session with HR directors, payroll managers, chief financial officers, tax managers and other senior executives responsible for employee compensation and payroll tax compliance. The session, scheduled for Wednesday, is aimed at ensuring proper understanding and implementation of the reforms, he said.

However, reactions in the comment section of Oyedele’s post suggested that not all workers benefited from the changes. Some netizens complained of higher tax deductions and reduced take-home pay. Rasha (@rasha2you) wrote, “Why is my take-home lesser? Stop acting like it’s everyone paying less tax I beg.” Another user, ‘Odogwu’ Michael, said his tax increased despite earning barely enough to cover basic needs, while High Bee (@ibukun36180571) stated that there was no reduction in his tax and that his salary had declined.

Addressing concerns about employees who may experience a reduction in net pay, Partner, Tax Reporting and Strategy at PwC, Kenneth Erikume, explained the implications of the graduated tax structure at the 2026 Nigeria Economic Outlook organised by FirstBank. He noted that income up to N800,000 is now exempt, with tax rates applying progressively thereafter, and income above N50m taxed at 25 per cent.

Erikume said that, assuming no significant reliefs are claimed, individuals earning below N25m annually 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. (The PUNCH)

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