The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has described the tax reform bills currently before the National Assembly as pro-workers, dismissing claims by Nigeria Labour Congress (NLC) President, Joe Ajaero, that the bills would negatively affect Nigerian workers.
Reacting to Ajaero’s New Year call for President Bola Tinubu to withdraw the tax bills, Oyedele explained that the proposed reforms are designed to improve the welfare of workers and the broader population.
In his New Year message, Ajaero argued that the tax reform bills should be withdrawn to allow wider stakeholder participation in crafting a tax system that aligns with national development objectives.
“We want to co-create a new national tax law that enjoys wider acceptance and fulfills its purpose of propelling development,” Ajaero stated.
While welcoming NLC’s interest, Oyedele refuted claims that the bills would harm workers, emphasizing that they represent the most worker-friendly tax reforms in Nigeria’s history.
“Although there is room for improvement through debates and engagements as part of the legislative process, the bills in their current form are designed to benefit Nigerian workers,” he said in a statement on his X account.
Key Benefits of the Tax Reform Bills
- Lower Taxes for Workers:
- Full tax exemption for low-income earners earning up to N1 million annually (N83,000 per month), covering about one-third of all private and public-sector workers.
- Reduced PAYE taxes for workers earning up to N20 million annually (N1.7 million per month).
- Support for Security Personnel:
- Exemption from PAYE taxes for members of the armed forces and other ranks fighting insecurity.
- Cost-of-Living Reliefs:
- Zero VAT on essential goods like food, healthcare, and education (60% of all consumption).
- VAT exemptions on transportation, renewable energy, baby products, sanitary towels, and fuel products (over 20% of all consumption).
- Combined provisions to cover nearly 100% of household consumption for low-income earners.
- Worker-Friendly Incentives:
- Tax breaks for wage awards and transport subsidies for low-income workers.
- Simplified processes for wage adjustments and caps on taxable benefits to ensure higher compensation.
- Affordable Housing Measures:
- VAT exemptions on rent and property acquisition.
- Stamp duty exemptions on rents below N10 million.
- Job Creation Provisions:
- Tax incentives for employers to hire more workers.
- Friendly tax rules for remote work opportunities.
- Tax exemptions for 97% of SMEs, with harmonized and reduced corporate tax rates for large businesses to stimulate growth and employment.
Collaboration with NLC
“We believe the NLC will not intentionally act against the interest of its members. We look forward to engaging with them to explore further improvements in the bills to benefit all Nigerians, including workers,” Oyedele concluded.
As the debate continues, the Presidential Committee on Fiscal Policy and Tax Reforms is optimistic about fostering collaboration to refine the bills and address the concerns raised by stakeholders.
