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.
In a detailed critique, Aderonke questioned Ajaero’s stance, highlighting the bill’s extensive consultations with stakeholders and its potential to benefit the majority.
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.
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.
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.
The reforms also prioritise modernising Nigeria’s tax administration system.
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.
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.
TimesNow.com.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: TimesNow.com.ng
