….Earners of N100m monthly to pay 25% tax
Nigerians earning N100 million and above monthly may soon begin to pay 25 percent personal income tax.
This is contained in a new tax bill being considered by the National Assembly.
Presidential Fiscal Policy and Tax Reforms Committee Chairman Taiwo Oyedele, who made this known on Monday, explained that the bill exempts persons who earn less than N100 million every month.
“If you earn N100 million a month, we’re taking up to 25 percent from you as a rich person. That’s because we need to balance the books,” Oyedele said at a breakout session of the ongoing 30th Nigeria Economic Summit (NES) in Abuja.
‘’For middle-income earners making N1.5 million or less per month, their income tax obligations would decrease, while those earning higher amounts would see incremental increases in their tax rates, eventually reaching 25 percent. Lower-income earners would be fully exempt from personal income tax.’’
He added that if the bill is passed by the National Assembly and assented to by President Bola Tinubu, payment might begin January 2025.
The tax committee chairman added that corporate income tax rate might drop from 30 to 25 percent.
Other significant tax adjustments include a reduction or elimination of Value Added Tax (VAT) on essential items and services like food, health, education, accommodation, and transportation.
Oyedele emphasised the need to strike a balance between easing the tax burden of lower-income earners and ensuring the wealthy contributed more to government revenue.
According to him, the tax reform is also expected to ease the tax burden of businesses.
“Today, whatever VAT (Value Added Tax) you (businesses) pay on assets—whether you’re building a factory, buying a laptop, or vehicles—you bear it. This increases your cost, and therefore, your pricing will go up. Once our reforms are implemented, you get the credit back 100 percent on services and assets.”
On concerns over tax incentives and waivers, Oyedele argued that their indiscriminate application harms the economy.
“We cannot give all the incentives being asking for. We think the biggest low-hanging fruit is removing these incentives and that’s exactly what we are doing,” Oyedele concluded.
