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The tax reform bill reportedly passed the second reading on Thursday, November 28, 2024, after extensive deliberation in the Senate. President Bola Tinubu’s proposed tax reform bill will exempt any Nigerian earning below N1 million per annum from the tax net. ...Tap To Read The Full Story Here | ..Tap To Read The Full Story Here...
During the plenary session on Wednesday, there was much discussion about the bill. Federal Government tax executives, including the Director-General of the Budget Office, Tanimu Yakubu; the Executive Chairman of the Federal Inland Revenue Service, FIRS, Zacch Adedeji; and the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, explained the benefits of the tax bill to the Nigerian economy if it becomes law.
It was clarified that the goal of the bill was to tax prosperity, not poverty. Individuals earning less than one million naira annually, including civil servants within the national minimum wage range, would be exempted from income tax.
Taiwo Oyedele explained, “The committee proposes four major bills aimed at overhauling the tax system. The Nigerian Tax Bill seeks to harmonize major taxes into one legislation, simplifies tax processes, and proposes exemptions for low-income earners.
“The Tax Administration Bill aims at establishing standards for tax administration, promotes the use of technology, and aims to streamline tax collection.
“Nigerian Revenue Service Establishment Bill proposes the establishment of a new revenue service to improve tax collection and coordination among agencies, while the Joint Revenue Board Establishment Bill aims to enhance collaboration among tax authorities and create a Tax Ombudsman to protect small businesses.
“Key proposals of the tax reform bills are elimination of minimum tax for loss-making companies; Introduction of a 15% effective tax rate on profits for large companies; removal of VAT on essential goods and services; and increased tax thresholds for personal income tax to exempt low-income earners.”
“The current VAT sharing formula is deemed unfair, favouring states with major corporate headquarters. The proposal includes a more equitable distribution based on consumption within states as against current sharing formula which lopsidedly favours Lagos State, being host to headquarters of corporate organizations.”
“Today, we are taxing people that earn N30,000 a month. That’s N1,000 a day. How can anybody survive earning N30,000 a month? Even if they live alone, they will do transport, they will buy food, they will pay rent, they will pay for electricity.
They cannot survive. So we are proposing in the bill before you that anybody earning N800,000 naira a year, including an extra N200,000 for rent, about N1 million a year, should not pay personal income tax. By the way, this threshold is not even the highest in Africa. It’s still lower than many small African countries,” he said.…READ THE FULL STORY FROM SOURCE : …READ THE FULL STORY FROM SOURCE
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