Leadnaija
During ongoing deliberations on Nigeria’s tax reform bills, Senator Adams has argued that taxation under the Pay-As-You-Earn (PAYE) system should be based on an individual’s place of residence, not workplace.
Speaking during the Senate plenary, Senator Adams stated:
“We can’t make two sets of laws for pay-as-you-earn; there are people working in the FCT but living in Nasarawa State, and there are people who work in Lagos but live in Ogun State. The logic of pay-as-you-earn is that you pay based on residence.”
His remarks highlight a growing debate over the structure of inter-state taxation, particularly in densely populated border regions like the FCT-Nasarawa and Lagos-Ogun corridors, where workers often live in one state but commute daily to another for employment.
The comment comes as the Senate considers reforms aimed at harmonizing tax laws, improving revenue collection, and resolving jurisdictional conflicts between states over income tax claims.
The proposal for residency-based taxation could potentially reshape revenue allocations and administrative responsibilities between states and the Federal Inland Revenue Service (FIRS), especially as Nigeria seeks to enhance tax compliance and equity.
