Nigeria is proposing 25% tax on high income earners with a monthly take home of N100 million. The proposal was announced by the Presidential Committee on Fiscal Policy and Tax Reform led by Taiwo Oyedele. It is expected to take off in January 2025.
Through the tax, the government wants to ease the tax burden on the low income earners. Also, the government wants to create a more streamlined and balanced tax system ensuring that the wealthy contribute more to government earnings. The government says it wants to make sure that the right individuals pay taxes in the country.
In line with this proposal, citizens earning N1.5 million per month would pay less taxes than those earning higher. Also, those earning the least monthly pay would be totally exempt from payment of taxes.
Since it was set up, the Tax Reform Commitee has proposed several changes to Nigeria’s tax system. Some of their proposals are; a new tax system which exempts manufacturers and small businesses from paying withholding tax, a proposal to exclude food and transport from taxes, introduction of Tax ID for bankers among others.
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These proposals are designed to broaden the tax net and reduce the burden of multiple taxation on businesses. Earlier this month, the government announced some tax incentives to ease the operations of small businesses in the country. It also approved incentives for companies employing more staff.
These incentives are could be crucial to the survival of some of these businesses as they are currently grappling with an uncertain economic climate.
Meanwhile, the Tax Reform Committee has sent ten bills to the National Assembly to effect some changes to the tax system.
