Nigeria’s tax reform bills aim to boost worker welfare, ease cost-of-living pressures, and reshape the economy with smart tax cuts.
The Presidential Committee on Fiscal Policy and Tax Reforms, led by Dr. Taiwo Oyedele, has unveiled sweeping tax changes designed to ease financial pressure on Nigerian workers and stimulate economic growth. The reforms, already passed by the House of Representatives, await Senate approval and presidential assent.
Key Highlights
PAYE Exemption for Low Earners
Workers earning up to N1.3 million per year (over N100,000/month) will pay zero PAYE tax. This benefits 35% of workers in both public and private sectors.
Reduced PAYE for Middle-Income Earners
Lower PAYE tax rates for those earning up to N20 million annually, impacting 60% of Nigerian workers.
Military Tax Relief
Armed forces personnel to receive full PAYE exemptions.
VAT Removed on Essentials
No VAT on food, healthcare, education, rent, transportation, renewable energy, CNG, baby products, sanitary towels, and fuel. These categories make up 82% of household spending, and nearly 100% for low-income families.
Boosts for Workers and Employers
1. Tax breaks for wage awards and transport subsidies.
2. Limits on taxable benefits-in-kind to leave more take-home pay.
3. Incentives for employers to hire and attract global remote work opportunities.
4. Stamp duty exemptions for rent under N1 million.
Next Steps
The Senate will soon review the bills. Once passed, President Tinubu is expected to sign them into law, marking a major policy shift aimed at economic equity and worker protection.
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