The Federal Government has clarified that all income earned in Nigeria, including proceeds from illicit activities such as commercial sex work, is taxable under existing law.
The clarification was given by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during a tax education session organised by the Redeemed Christian Church of God, City of David, Lagos.
Oyedele explained that money transferred as upkeep or gifts is not taxable, but once payment is made in exchange for a product or service, the law requires taxation.
Quoting him, he said:
“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.”
He, however, urged Nigerians to view the reforms in their broader context rather than focusing on isolated aspects. Using a parable, Oyedele said:
“The starting point for me is always to give context… The first message is a proverbial blind man and an elephant… None of them got the right answer because they didn’t feel the big picture.”
He added that the tax reforms — signed into law earlier this year and taking effect from January 1, 2026 — are “the most transformative, most significant in our nation’s history,” comprising over 200 major changes across more than 400 pages.
The new regime consolidates Nigeria’s tax laws into a single statute to simplify compliance and curb multiple taxation disputes. It exempts workers earning below N800,000 annually from personal income tax, while companies with turnover up to N100m and assets not exceeding N250m will be exempt from company income tax, capital gains tax, and the new development levy.
Oyedele stressed that the reforms are designed to impact individuals, business owners, employees, employers, and civil servants alike, ensuring a simpler and fairer system that improves compliance and broadens revenue sources.
