The Nigerian government has approved tax incentives for companies employing more staff. The incentive also includes a relief package to workers earning between N200,000 and N400,000.
In addition, this incentive is designed to motivate businesses to hire additional employees and undertake expansion projects, ultimately enhancing their operational capacity and contributing to a reduction in unemployment rates.
The approval was announced at a meeting of the Federal Executive Council in Abuja, the nation’s capital. It is in line with the recommendations of the Presidential Committee on tax reforms. Nigeria’s President Bola Tinubu had created the committee in August 2023.
The committee was given the task of assessing Nigeria’s tax regulations and creating a more conducive environment for investment.
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Also, its mission focused on resolving issues related to multiple taxation and increasing Nigeria’s tax-to-GDP ratio. After a series of meetings, the committee made several recommendations to the government.
Some of the recommendations include to amend the income tax statutes, facilitate the export of goods and services, overhaul the exchange rate framework, and improve foreign exchange liquidity.
The approval of this recommendations could be crucial towards improving investor’s confidence in Nigeria. This is hinged on the fact that the reforms will reduce total taxes from over 50 to just 8, remove withholding taxes as well as cut import duties for farmers and manufacturers .
