By Tanimu Yakubu<\/b><\/p>\n
THE essay you circulated is rhetorically powerful, but its \u201csimplicity\u201d is achieved by subtracting the very provisions that determine the outcome. That is not clarity; it is selective accounting.<\/p>\n
Let\u2019s dismantle the argument on its own terms\u2014calmly, sequentially, and with arithmetic that actually follows the law.<\/p>\n
1) The core confusion: pension and health insurance are not taxes\u2014they are deductible contributions<\/p>\n
A tax is a compulsory payment to government for general public purposes with no direct ownership claim by the payer.<\/p>\n
A pension contribution is a deferred wage placed in a worker\u2019s Retirement Savings Account\u2014owned by the worker, regulated by law, and paid out to the worker later. Under Nigeria\u2019s contributory pension framework, the employee contribution is commonly 8% (with an employer minimum contribution alongside it).<\/p>\n
Likewise, national health insurance contributions\/premiums are risk-pooling payments for defined health coverage, not a general revenue levy; and (crucially) they are among the items treated as deductions in personal income tax computations.<\/p>\n
So when someone frames pension\/health insurance as \u201cproof the poor are being taxed,\u201d they are committing a category error:<\/p>\n
\u2022 A deduction is not a tax.<\/p>\n
\u2022 A contribution you own (pension) is not a levy you lose.<\/p>\n
\u2022 A premium that buys coverage is not a payment for \u201cgovernment enjoyment.\u201d<\/p>\n
If anything, the presence of these deductions is evidence of an attempt\u2014however imperfect\u2014to avoid taxing the portion of income being set aside for welfare\/insurance.<\/p>\n
2) The decisive arithmetic the essay avoids: the \u20a6800,000 tax-free threshold<\/p>\n
Under the new regime described in multiple reputable summaries, the first \u20a6800,000 of annual income is taxed at 0%.
\nThat is not a footnote. That is the hinge.<\/p>\n
Now apply it to \u201cJoseph\u201d:<\/p>\n
Monthly income: \u20a675,000
\n\u2022 Annual income: \u20a675,000 \u00d7 12 = \u20a6900,000<\/p>\n
Under a system where the first \u20a6800,000 is taxed at 0%, Joseph is not \u201csquarely inside\u201d some punitive bracket. He is \u20a6100,000 above the zero band.<\/p>\n
Even before deductions, the portion potentially exposed to tax is \u20a6100,000 per year.<\/p>\n
If the next band is taxed at 15% (as these summaries indicate), then Joseph\u2019s gross annual PIT exposure is:<\/p>\n
\u2022 \u20a6100,000 \u00d7 15% = \u20a615,000 per year
\n\u2022 \u20a61,250 per month<\/p>\n
Now add pension:<\/p>\n
If Joseph contributes pension at 8% (even using the essay\u2019s own assumption), that is:<\/p>\n
\u2022 8% \u00d7 \u20a6900,000 = \u20a672,000 in pension contributions annually (simplified)
\nThat reduces the portion above \u20a6800,000 from \u20a6100,000 to \u20a628,000. Tax becomes:
\n\u2022 \u20a628,000 \u00d7 15% = \u20a64,200 per year
\n\u2022 \u20a6350 per month<\/p>\n
And if Joseph also has any deductible health insurance contribution (which many formal arrangements do), he can easily fall below \u20a6800,000 taxable income, making his PIT zero.<\/p>\n
What this means<\/p>\n
The essay\u2019s \u201cpublic U-turn\u201d story is not proof that \u201cthe poor will pay tax.\u201d<\/p>\n
It is proof that the narrator\u2019s demonstration did not apply the actual threshold structure that defines liability.<\/p>\n
That is not logic. That is stage-managed arithmetic.<\/p>\n
3) The poverty-line move: a PPP concept misused as a nominal naira salary cut-off<\/p>\n
The essay claims a World Bank \u201cpoverty line\u201d of $4.20\/day and then converts it into a naira monthly salary figure using a simple exchange conversion to get \u201c\u20a6190,000 per month.\u201d<\/p>\n
But the World Bank\u2019s $4.20 line is reported in PPP terms (international dollars), not a naira-at-market-exchange salary threshold you can convert with casual FX math.<\/p>\n
So the statement \u201ceveryone earning below \u20a6190,000\/month is poor\u201d is not an \u201cirrefutable fact.\u201d It is a conversion shortcut that swaps a technical welfare metric for a political talking point.<\/p>\n
Even more: the World Bank updated global poverty lines in 2025 (with new PPP bases), which reinforces that these lines are statistical constructs, not the kind of direct nominal wage threshold the essay pretends they are.<\/p>\n
4) \u201cWiden the tax base\u201d does not logically mean \u201ctax the poor\u201d<\/p>\n
The essay\u2019s claim is:<\/p>\n
\u201cThe rich are already taxed, so widening must reach downward.\u201d<\/p>\n
That is a false syllogism.<\/p>\n
\u201cWidening the tax base\u201d can mean (among other things):<\/p>\n
\u2022 moving non-compliant high earners into compliance<\/p>\n
\u2022 closing loopholes and leakages<\/p>\n
\u2022 capturing parts of the digital and informal-but-affluent economy<\/p>\n
\u2022 improving employer withholding integrity<\/p>\n
\u2022 reducing avoidance via better administration<\/p>\n
Nigeria\u2019s revenue problem is not \u201cthe poor escaping.\u201d Nigeria\u2019s problem is a historically weak tax-to-GDP ratio and heavy reliance on borrowing; tax reforms have been publicly framed as part of reversing that.<\/p>\n
So \u201cwidening\u201d does not necessarily mean \u201cdrag subsistence wages into the net.\u201d It often means: make the system catch who already should be paying.<\/p>\n
5) The emotional overload: corruption lists are not an argument against the structure of a tax schedule<\/p>\n
The essay spends pages listing possible misuses of public funds (A\u2013Z). Some may be legitimate governance concerns, but they do not prove the specific claim being sold: \u201cThis tax takes money from the poor.\u201d<\/p>\n
If your target is accountability, the rational conclusion is not \u201ctherefore don\u2019t tax.\u201d The rational conclusion is:<\/p>\n
\u2022 ring-fence, publish, and audit collections;<\/p>\n
\u2022 improve transparency of allocation;<\/p>\n
\u2022 tighten procurement;<\/p>\n
\u2022 prosecute leakage;<\/p>\n
\u2022 strengthen citizen oversight\u2014using the legitimacy that taxation creates.<\/p>\n
Historically, broad-based taxation has often strengthened demands for representation and accountability (\u201cno taxation without representation\u201d is not a slogan of lending institutions; it is a logic of citizen-state bargaining). The essay flips that logic on its head by implying that lenders fear Nigerians paying taxes because taxes would empower citizens. That is not an argument; it is a narrative device.<\/p>\n
Meanwhile, Nigeria\u2019s borrowing constraints are real, and a reform agenda that reduces debt-dependence is not \u201cindifference\u201d; it is sovereignty through solvency.<\/p>\n
Proof-by-proof: what the essay is doing (and why it misleads)<\/p>\n
Deception 1: Re-labelling deductions as \u201ctaxes\u201d<\/p>\n
\u2022 Pension\/health insurance are framed as \u201cproof of taxation.\u201d<\/p>\n
\u2022 In reality, they are welfare-linked contributions and deductions that reduce taxable income.<\/p>\n
Deception 2: Ignoring the 0% band<\/p>\n
\u2022 The \u20a6800,000 annual tax-free threshold is the central fact.<\/p>\n
\u2022 Without it, the story can manufacture outrage at \u20a675,000\/month.<\/p>\n
Deception 3: PPP poverty line converted as if it were a salary threshold<\/p>\n
\u2022 $4.20\/day is PPP-based and not meant for na\u00efve FX-to-naira monthly wage claims.<\/p>\n
Deception 4: False dilemma<\/p>\n
\u2022 \u201cOnly three possibilities: the poor, livestock, or ghosts.\u201d<\/p>\n
\u2022 Serious tax administration realities are ignored to force a punchline.<\/p>\n
Deception 5: Moral indictment substituted for computation<\/p>\n
\u2022 A\u2013Z allegations create heat, not proof.<\/p>\n
\u2022 Even if every allegation were true, it still wouldn\u2019t change the tax schedule math.<\/p>\n
The bottom line<\/p>\n
If you want to disagree \u201cmost vehemently and logically,\u201d this is the clean core:<\/p>\n
1. The new structure explicitly shields low incomes via a large zero-rated band.<\/p>\n
2. Pension and health insurance deductions are welfare design features, not stealth taxation.<\/p>\n
3. The essay\u2019s outrage depends on omitting the very thresholds and concepts (PPP) that make its conclusion collapse.<\/p>\n
– Yakubu is Director-General, Budget Office of the Federation<\/p>\n","protected":false},"excerpt":{"rendered":"
By Tanimu Yakubu THE essay you circulated is rhetorically powerful, but its \u201csimplicity\u201d is achieved by subtracting the very provisions<\/p>\n","protected":false},"author":1,"featured_media":19590,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-19588","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-from-the-grassroots"],"_links":{"self":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/19588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/comments?post=19588"}],"version-history":[{"count":1,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/19588\/revisions"}],"predecessor-version":[{"id":19591,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/posts\/19588\/revisions\/19591"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/media\/19590"}],"wp:attachment":[{"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/media?parent=19588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/categories?post=19588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thenewsnow.org\/index.php\/wp-json\/wp\/v2\/tags?post=19588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}