The presidency has strongly defended the proposed tax reform bills of President Bola Tinubu, stressing the potential benefits the legislation will bring to Nigerians.
In a statement released on Sunday, Sunday Dare, Special Adviser to President Tinubu on Public Communication and Orientation, took aim at Senator Ali Ndume, who had earlier dismissed the bill, calling it “dead on arrival” without giving it due consideration.
The presidency outlined 15 advantages of the proposed reforms, urging critics to first examine the details of the bill before drawing conclusions.
According to Dare, the tax reforms are designed to stimulate the economy, promote business growth, reduce the tax burden on citizens, and provide significant relief for low-income households.
Among the major highlights of the reform bill, Dare emphasized the introduction of remote work opportunities, zero-rated VAT on essential goods and services like food, education, and healthcare, and tax exemptions for small businesses.
“These reforms will empower our youth in the global business environment by facilitating remote work opportunities and promoting exports of goods, services, and intellectual property,” said Dare. “For those who believe the bill should be dismissed without careful study, these are just a few of the changes proposed.”
The 15 key changes outlined by the presidency include:
1. Remote Work Empowerment: Changes to income tax laws to facilitate remote work for Nigerians, particularly in global business process outsourcing, thereby empowering the youth in the digital economy.
2. Zero-rated VAT: The proposal to implement zero VAT on exports, including goods, services, and intellectual property, aiming to boost Nigeria’s global business competitiveness.
3. Small Business Exemptions: Tax exemptions for small businesses, including WHT, VAT, and a 0% corporate income tax (CIT).
4. Income Tax Relief for Workers: Exemption from personal income tax for minimum wage earners and reduced tax burdens for over 90% of public and private sector workers.
5. Cost-of-living Relief: Zero VAT on food, education, health services, and exemptions for rent and public transportation—items that make up 82% of household consumption for most Nigerians.
6. Tax Ombudsman: The creation of a Tax Ombudsman to advocate for an improved tax system and protect vulnerable taxpayers.
7. Corporate Tax Cuts: Reduction in corporate income tax from 30% to 25% over two years and harmonization of all taxes into a single, lower levy.
8. Elimination of Minimum Tax: Abolition of minimum tax for loss-making companies or those with low margins.
9. Input VAT Credit for Businesses: Businesses will receive VAT credits for assets and services, lowering investment costs and improving competitiveness.
10. Progressive Tax Reforms: Redesigning the personal income tax band and rates to be more progressive while ensuring that the poor are protected.
11. Simplified Tax Payments: Permitting tax payments on foreign currency transactions in naira, simplifying compliance and reducing exchange rate pressures.
12. Repeal of Nuisance Taxes: Proposal to repeal over 50 nuisance taxes and levies, consolidating the remaining ones into a simpler, single-digit system.
READ ALSO: Presidency Accuses Atiku of Envy Over Tinubu’s Leadership
13. Equitable VAT Revenue Sharing: Adjustments to ensure fair distribution of VAT revenues, especially for states with fewer major companies.
14. Tax Incentive Rationalization: The rationalization of tax incentives to create a level playing field for all investors.
15. National Fiscal Policy Framework: Introduction of a new National Fiscal Policy to guide responsible borrowing, fair taxation, and sustainable spending.
Leave a comment