Taiwo Oyedele Lists 50 Ways Every Nigerian Can Benefit From Tinubu's Tax Reform Bills
- Nigerian tax reforms have been a subject of strong debate, especially among northern leaders and politicians
- The bill, which is currently in the National Assembly, will rejig how the funds generated in the country are shared
- Despite the arguments, there is a strong belief that the tax reforms will be a game-changer for the Nigerian economy
Taiwo Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has listed ways tax reforms will benefit Nigerians.
In a post shared on his verified X account on Monday, December 9, Oyedele highlighted how the tax reforms will positively affect Nigerians, both directly and indirectly.
Source: Facebook
He explained under various headings, which include households and individuals (including the youth), small businesses, businesses and investments, high-income earners and HNIs, and subnational governments.
His words:
"There is something in the tax bills for everyone."
According to Oyedele, here is a snapshot of how the reform bills will benefit Nigerians.
A. Households and individuals, including the youth:
1. Complete exemption of low-income earners up to N1m p.a. (about N83k per month) from PAYE
2. Reduced PAYE tax for those earning a monthly salary of N1.7m or less
3. Zero (0%) VAT on food, healthcare, education, electricity generation and transmission
4. VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, rent and fuel products
5. Tax break for wage awards and transport subsidy to low-income earners
6. Tax incentives for employers to hire more people incrementally than in the previous 3 years
7. Exemption of stamp duties on rent below N10m
8. PAYE tax exemption for other rank and armed forces fighting insecurity
9. Friendly tax rules for remote workers and digital nomads
10. Clarity on taxation of digital assets to avoid double taxation and allow a deduction for losses
B. Small Businesses:
1. Increase in tax exemption threshold for small businesses from an annual turnover of N25m to N50m
2. Exemption from company income tax for small businesses (tax at 0%)
3. No withholding tax deduction on business income of small businesses
4. Exemption from the requirement to deduct and account for tax on payments to vendors
5. Simplified statement of accounts attested to by small business owners for tax returns in place of audited financial statements
6. Introduction of the Office of Tax Ombud to protect taxpayers against arbitrary tax assessments
7. Tax disputes affecting businesses to be resolved within 14 days by the Tax Ombud
8. Harmonisation of taxes and repeal of multiple levies
9. Outlaw cash payment and physical roadblocks imposing a burden on businesses
10. Attractive tax regime to encourage formalisation of business and facilitate growth
C. Businesses and investments:
1. Reduction of corporate income tax rate from 30% to 25% and harmonisation of earmarked taxes at a reduced rate
2. Unilateral tax credit for income earned abroad to avoid double taxation and input VAT credit on assets and services to reduce the cost of production
3. Introduction of economic development incentive for priority sectors
4. Friendly tax regime for business restructuring and reorganisation to improve efficiency
5. Clarity on the 6-year statute of limitation and resolution of objections in favour of the taxpayer if the tax authority fails to respond within 90 days
6. Option to pay taxes and levies on foreign currency-denominated transactions in Naira
7. Faster tax refunds within 90 days (30 days for VAT refunds) with the option of set-off against any taxpayer's tax liability.
8. Request for an advance ruling by the taxpayer to be provided by the tax authority within 21 days
9. Expense incurred by a start-up within 6 years pre-commencement of business to be tax deductible
10. Restriction of interest deduction will only apply to related party loans to reduce the cost of finance for businesses
D. High Income Earners and HNIs:
1. Tax exemption on personal effects not exceeding N5m, sale of a dwelling house, and up to two private vehicles
2. VAT exemption on purchase of real estate
3. Clarity on taxation of benefit in kind and limit of taxable accommodation benefit to 20% of annual income
4. Exemption of tax on the sale of shares up to N150m and gains not exceeding N10m
5. Progressive personal income tax rate up to 25% for HNIs
6. Tax exemption on compensation for loss of employment not exceeding N50m
7. Progressive VAT rate on items mostly consumed by high-income earners to partly compensate for exemption on essential consumptions
8. Tax exemption for income earned on bonds issued by states in addition to federal government bonds
9. Reduction in the corporate tax rate for businesses and a tax break for hiring more people
10. Exemption of tax on bonus shares for investors in Nigerian companies
E. Subnational government:
1. Federal government to cede 5% of VAT revenue to states
2. Transfer of income from Electronic Money Transfer levy exclusively to states as part of stamp duties
3. Repeal of the obsolete stamp duties law and re-enactment of a simplified law to enhance the revenue for states
4. States to be entitled to the tax of Limited Liability Partnerships
5. Tax exemption for state government bonds to be at par with federal government bonds
6. More equitable model for VAT attribution and distribution
7. Integrated tax administration to provide tax intelligence to states, strengthen capacity development and collaboration, and scope of Tax Appeal Tribunal to cover taxpayer disputes on state taxes
8. Powers for AGF to deduct taxes unremitted by a government or MDA and pay to the beneficiary government
9. Framework to grant autonomy for states' internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism
10. Legal framework for taxation of lottery and gaming and introduction of withholding tax for the benefit of states.
Tinubu's tax reform bill gets support
Legit.ng earlier reported that northern governors have been advised to accept the new tax reform bills forwarded to the National Assembly by President Bola Tinubu.
Adamu Garba, a former presidential aspirant, gave this advice to the governors, adding that the bills' advantages outweigh their disadvantages.
Garba further urged the governors and other northern elites to look inward and venture into farming and industry to generate internal revenues in their states."
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
Source: Legit.ng
