Tax Expert Pushes for Reform Bill Amid Labour Union Resistance

• A tax expert, Arabirin Aderonke, has refuted the claims of labour unions, which called for the scrapping of the new Tax Reform Bill
• Aderonke said that the bill is essential for boosting economic growth and easing financial burdens on Nigeria workers
• She questions the labour union’s leader, Joe Ajaero’s stance, stressing the bill-wide consultations with stakeholders

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Tax Reform Bill, a landmark legislation aiming to recalibrate Nigeria’s tax system, has recently drawn sharp criticism from Joe Ajaero, President of the Nigeria Labour Congress (NLC). 

Ajaero’s call for the bill’s withdrawal has sparked debate among stakeholders. Still, tax analyst Arabinrin Aderonke argues that the legislation is essential for fostering economic growth and alleviating the financial burden on Nigerian workers.

Analyst questions labour union’s stand

In a detailed critique, Aderonke questioned Ajaero’s stance, highlighting the bill’s extensive consultations with stakeholders and its potential to benefit the majority. 

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“The Tax Reform Bill is not just another policy document; it is an initiative aimed at ensuring a more inclusive and equitable economy for all Nigerians,” she asserted.

One of the bill’s standout features is its provision for targeted tax relief. Workers earning up to ₦1 million annually will be exempt from PAYE taxes, while salaries below ₦1.7 million monthly will see reduced tax rates. 

Essential goods and services like food, healthcare, and electricity are zero-rated for VAT, directly reducing living costs for low—and middle-income earners.

Often hailed as the backbone of Nigeria’s economy, small businesses will benefit from an increased tax exemption threshold, rising from ₦25 million to ₦50 million in annual turnover. 

“This change means many small enterprises can enjoy full exemptions from company income tax, thereby reducing operating costs and enabling growth,” Aderonke noted.

Benefits of the Tax Reform Bill

The bill reduces the corporate income tax rate from 30% to 25% for larger corporations. It also introduces the Office of Tax Ombud to address disputes and prevent arbitrary assessments, fostering transparency and fairness in tax administration.

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President Bola Ahmed Tinubu’s administration has emphasised harmonising tax policies across states to eliminate overlapping levies. The bill allocates 60% of VAT revenue to states where goods and services are consumed, giving states more financial control to improve local infrastructure and services. 

“This approach empowers states to rely less on federal allocations, fostering economic independence,” Aderonke explained.

The reforms also prioritise modernising Nigeria’s tax administration system. 

“By simplifying processes and protecting taxpayers’ rights, the government signals its commitment to creating an investor-friendly economy,” Aderonke added. This is expected to attract local and foreign investments, stimulate job creation, and promote business expansion.

Critics, including Ajaero, have raised concerns about the bill’s implementation and alignment with workers’ interests. However, Aderonke countered these claims, urging the NLC leader to examine the bill’s provisions more closely. 

“This is a once-in-a-generation opportunity to reshape Nigeria’s economic sector,” she concluded, emphasising the need for accurate information to guide public opinion.

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As the debate unfolds, the Tax Reform Bill remains a pivotal step towards economic equity and growth, promising to transform Nigeria’s tax landscape for the benefit of its citizens.

Over 90% of workers to pay lower taxes in the proposed bill

Legit.ng earlier reported that when the proposed tax reform bill secures legislative approval, over 90% of Nigeria's private and public sector workers will pay lower taxes.

This is against widely peddled opinions suggesting that workers will pay more tax under the new bill.

Taiwo Oyedele, the Presidential Committee on Fiscal Policy and Tax Reforms chairman, made this assertion on his X (formerly Twitter) handle on Monday night.

Source: Legit.ng