President Bola Tinubu is focused on going through with the tax reform bills after turning down the advice of the National Economic Council (NEC) to withdraw them.
The president rejected the recommendation of NEC last Friday in a statement signed by his Special Adviser on Information & Strategy, Bayo Onanuga who also gave reasons for the rejection.
Special Adviser on Public Communication and Orientation to the president, Sunday Dare, in a post on his official X account on Thursday night also highlighted 13 things to know about the tax reform bills.
“The Nigeria tax system has overtime become complex, growth stifling and low revenue yielding due in large part to obsolete and ambiguous tax laws,” Dare wrote.
“Enacting a new harmonised and simplified ones for sustainable economic growth and to deliver shared prosperity for Nigerians becomes necessary,” he said before highlighting the advantages of the tax reform bills.
- Changes to the income tax laws to facilitate remote work opportunities for Nigerians in Nigeria within the global business process. This will empower Nigerian youths to play a key role in the digital economy space.
- Zero rated VAT and other incentives to promote exports in goods, services, and intellectual property.
- Tox exemptions for small businesses including WHT. VAT, and 0% CIT.
- Exemption from personal income tax for minimum wage eamers and reduced tox burden for over 90% of private and pubic sector workers.
- VAT at 0% for food, education, health, and exemption for rent and public transportation. These tems constitute an average of 82% of household consumption and nearly 100% for low income households to ameliorate the rising cost of living for the masses.
- Introduction of the Tax Ombudsman to advocate for improved tax system and protect vulnerable taxpayers.
- Reduction of corporate income tax rate from 30% to 25% over the next two years and elimination of earmarked taxes on companies to be replaced with a harmonised single levy of a reduced rote.
- Elimination of minimum tax on loss-making companies and those with low margins.
- Grant of input VAT credit to businesses on assets and services to reduce cost of investment and improve competitiveness.
- Redesign of the personal income tax band and rates. VAT and Capital Gains Tax to be progressive while protecting the poor.
- Proposal to repeal over 50 nuisance taxes and levies, and harmonise the remaining taxes to a single digit.
- Rationalisation of tax Incentives to reduce uncertainty and provide aEquitable basis for VAT revenue sharing to ensure that states without many headquarter companies are fairly treated and recognised for their economic contributions level playing field for all investors.
- A new National Fiscal Policy to set the framework for fair taxation, responsible borrowing and sustainable spending.
