Tax Reform Bills to boost workers’ welfare — FG
…Bills will reshape Nigeria’s tax landscape, enhance economic opportunities
By Seun Ibiyemi
In response to the Nigerian Labour Congress’ (NLC) request that the Federal Government withdraw the controversial tax bills from the National Assembly, the federal government has outlined its proposed Tax Reform Bills, emphasising their potential to significantly enhance the welfare of workers across the country.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele in a statement on his X, formerly Twitter, handle described the bills as “the most pro-workers tax reform in Nigerian history.”
He said, “the proposed measures are designed to improve workers’ disposable income, reduce the cost of essential goods and services, and stimulate job creation.
“Workers earning up to ¦ 1 million annually (approximately ¦ 83,000 per month) will be fully exempt from PAYE tax, benefiting about one-third of workers in both public and private sectors.
“Progressive tax reductions are planned for those earning up to ¦ 20 million annually, covering an additional 60% of the workforce.
“Special exemptions are included for members of the armed forces combating insecurity.”
Oyedele stated that this will help Nigerians have affordable Living Costs, essential goods and services such as food, healthcare, education, transportation, and renewable energy will be exempt from VAT, accounting for about 82% of household consumption.
“Baby products, sanitary items, and fuel products are also VAT-free, providing relief for low-income families.
“Tax waivers will make housing more affordable by exempting rent and property acquisitions from VAT and eliminating stamp duties on rents below ¦ 10 million.
“Employers will receive tax incentives for hiring more workers, while 97% of SMEs will remain tax-exempt to encourage growth and employment”.
“Tax breaks on wage awards and transport subsidies will enable higher worker compensation.A cap on taxable benefits will reduce financial burdens for employees,” Oyedele said.
While emphasising the pro-worker nature of the reforms, the government acknowledged the need for further stakeholder engagement.
“We believe the NLC will not intentionally work against the interests of its members,” the statement read, inviting discussions to refine the bills for the benefit of all Nigerians.
The NLC has expressed concerns about potential impacts on workers but has yet to issue a formal response to the government’s assurances. With the legislative process underway, the government remains optimistic about fostering consensus on the reforms.
If passed, these bills are expected to reshape Nigeria’s tax landscape, enhancing economic opportunities while alleviating the financial challenges faced by workers.
