By Abdulahmeed Abdulrozaq Bilal | Fact Frontier.
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In a move that has sparked widespread debate, the Nigerian government has affirmed that under its new tax legislation, all income generated within the country is subject to taxation, with officials explicitly using the example of earnings by sex workers, often locally referred to as 'runs girls,' to illustrate the point. The statement aims to underscore the government's commitment to expanding the tax base and applying a principle of legal neutrality to sources of income.
The controversial clarification came from Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. During a public session on tax education, Oyedele stated that the newly signed Nigeria Tax Act, 2025, focuses on the nature of the transaction rather than the morality or legality of the profession. He explained that while gifts sent as family upkeep are not taxable, any sum of money received in exchange for a service rendered constitutes taxable income.
To drive this point home, Oyedele directly addressed the issue of sex work. He was quoted by multiple news outlets, including Premium Times, as stating,
How do you tax a prostitute? I am giving an example. If you are a prostitute, it is not a legal business but if you earn income, it is taxable because the tax law is neutral to the legitimacy of the activity.This analogy was intended to be a stark example of the law's breadth, though it inevitably drew mixed reactions from the public.
The legal framework for this position is the Nigeria Tax Act, which was signed into law on June 26, 2025, and is scheduled to take full effect on January 1, 2026. The comprehensive legislation represents the most significant overhaul of Nigeria's tax system in decades. Its core objectives are to simplify the complex tax structure, foster a more business-friendly environment, and, crucially, widen the tax net to include segments of the economy that have traditionally operated outside the formal tax system.
This principle of taxing all income, regardless of source, is not entirely novel in tax jurisprudence, but its explicit application to the informal and shadow economies in Nigeria marks a new frontier for the Federal Inland Revenue Service. The logic, as explained by tax policy experts, is that the tax code deals with the character of the income itself, not the legal status of the underlying job. This approach has precedents in other jurisdictions, where illicit earnings can be subject to tax claims by the authorities.
Beyond the headline-grabbing example, the new tax act introduces several key changes designed to offer relief to the majority of low-income earners. A central provision is the significant increase in the tax-free threshold. According to the act, individuals with an annual consolidated salary of N800,000 or less will now pay zero personal income tax. This measure is aimed at reducing the tax burden on the working poor and stimulating disposable income at the grassroots level.
Furthermore, the reforms introduce revised income tax bands. For instance, income from N800,001 to N6 million per annum will be taxed at 15 percent, while earnings from N6,000,001 to N100 million will be taxed at 25 percent. A top band of 35 percent is reserved for individuals earning above N100 million annually. These changes are part of a broader strategy to create a more progressive tax system where those with the greatest ability to pay contribute a larger share.
The public reaction to the 'runs girls' taxation comment has been predictably polarized. Some citizens have applauded the government's no-nonsense approach to revenue collection, arguing that it demonstrates a commitment to equity and the rule of law. Others, however, have criticized the statement as tone-deaf and impractical, questioning the mechanics of how such individuals would be identified, registered, and compelled to pay taxes for an illegal profession. Critics argue that it highlights the challenges of enforcing lofty policy ideals in a complex socio-economic reality.
An analysis by Business Day newspaper noted that Oyedele's example was primarily a
theoretical illustration of the principle of tax neutrality.The real-world application, especially concerning illegal activities, remains legally and logistically fraught. However, the underlying message is clear: the government is casting a wide net. The same principle applies to a growing digital economy, including social media influencers, content creators, and traders in digital assets like cryptocurrency, all of whom are now firmly in the sights of the tax authority.
As Nigeria prepares for the full implementation of the new tax law in 2026, the debate it has ignited reflects a nation at a crossroads. The government is grappling with the urgent need to increase revenue without stifling economic growth or overburdening its most vulnerable citizens. The statement on taxing sex workers' income, while provocative, serves as a potent symbol of the administration's ambitious and contentious drive to leave no naira of earned income behind in its quest for fiscal consolidation.
