The Nigerian Senate is set to pass the Tax Reform Bills today, November 28, 2024, which will exempt individuals earning below N1 million per annum from income tax.
The bills, presented by President Bola Tinubu, aim to overhaul the tax system, simplify tax processes, and promote economic growth.
According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, the reform bills are designed to tax prosperity, not poverty.
The bills propose four major pieces of legislation: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
Key proposals include:
- Exemption from income tax for individuals earning below N1 million per annum
- Elimination of minimum tax for loss-making companies
- Introduction of a 15% effective tax rate on profits for large companies
- Removal of VAT on essential goods and services
- Increased tax thresholds for personal income tax to exempt low-income earners
The bills also aim to correct the lopsided tax gain derivation and promote a more equitable distribution of VAT revenue among states.
Source: Vanguard
