The Chairman of the Presidential Fiscal Policy & Tax Reforms Committee, Mr. Taiwo Oyedele, on Saturday said the new tax reform bills were in the interest of the Nigerian workers, insisting that the changes in the tax bills should be supported by everyone who seeks the well-being of Nigerian workers.
In his message released on Saturday through his X account, to the Nigerian workers in commemoration of this year’s Workers’ Day, Oyedele, outlined some key areas where the bills would improve the welfare of the Nigerian workers as well as the promoters of the Small and Medium Scale businesses, stressing that the bills would increase the net income of the workers.
While calling on the support of the organised labour, Oyedele said: “We believe that the NLC and the TUC will not intentionally work against the interests of their members.”
According to the tax expert, the new bills would lower taxes to enhance the disposable income of workers.
He pointed out that the bills made provision for the full exemption for workers earning up to N1.3million per annum (over N100,000 per month), representing not less than 35 per cent of all workers in the private and public sectors from Pay As You Earn (PAYE) tax.
Other benefits, according to him, were the full PAYE tax exemption for members of the armed forces; and the reduced PAYE tax for workers earning up to N20 million yearly (about N1.7million per month), which would benefit an additional 60 per cent of all workers.
On the measures to reduce the cost of essential items, Oyedele refers to the zero (0%) Value Added Tax (VAT) on food, healthcare, and education, representing about 60 per cent of all consumption.
He listed the others in this category to include: VAT exemption on rent, transportation, renewable energy, CNG, baby products, sanitary towels, and fuel products representing over 20 per cent of all consumption.
He explained: “These items constitute an average of 82 per cent of household consumption and nearly 100 per cent for low-income earners to cushion the impact of rising cost of living for workers.”
According to Oyedele, the new bills also contain incentives to facilitate higher compensation for workers through tax breaks for wage awards and transport subsidy to low-income earners. It also includes the removal of restrictions and bureaucratic approvals for wage awards and the introduction of a cap on the amount that may be taxed as a benefit-in-kind granted to workers.
He drew attention to the Tax waivers to promote affordable housing, especially the VAT exemption on rent and acquisition of real property as well as exemption of stamp duties on rent below N1 million.
The bills also provided incentives to stimulate employment opportunities for workers with tax incentives for employers to hire more workers.
It is believed the tax incentives will enable organisations to recruit more staff, which will in turn lead to more employment generation.
He maintained that the new tax regime provides friendly tax rules to attract international remote work opportunities for Nigerians.
Other provisions, according to him, include tax exemption for 97 per cent of SMEs earning an annual turnover of N100m or less, harmonising and reducing corporate tax burden for large businesses to stimulate growth and create more employment opportunities for workers.