By Arabinrin Aderonke
It’s a new year, a year that will possibly see to the passage and implementation of the People’s Bill, also known as the Tax Reform Bills. For Nigerian workers, the conversation surrounding this legislation is not just a political or economic issue but a matter of personal and collective empowerment. Following the recent call for its withdrawal by Joe Ajaero, President of the Nigeria Labour Congress (NLC), it is imperative to dispel any misconceptions and highlight the truth.
Joe Ajaero’s call for the withdrawal of the Tax Reform Bill raises questions that I believe demand serious scrutiny. Are other Labour members in agreement with his stance, or is this an isolated position? Has there been adequate consultation with unions, economic experts, and the workers who stand to gain the most from this legislation? With breakdowns of the bill consistently shared in the media, I wonder if Ajaero has taken the time to truly study its provisions. Is his opposition rooted in legitimate concerns or a misunderstanding of the bill’s intent and structure? To me, the Tax Reform Bill is not just another policy document; it is an initiative aimed at ensuring a more inclusive and equitable economy for all Nigerians.
Tax Reform Bill is more concerned about the masses, especially Nigerian workers. The Bills bring targeted relief to Nigerians by exempting those earning up to ₦1 million annually from PAYE taxes and reducing rates for salaries below ₦1.7 million monthly. Essentials like food, healthcare, education, and electricity are zero-rated for VAT, transport, rent, and baby products, directly reducing living costs. These measures prioritize affordability and financial relief for low and middle-income earners.
Small businesses, long regarded as the backbone of the Nigerian economy, are set to benefit from an increased tax exemption threshold, now raised from ₦25 million to ₦50 million in annual turnover. This means many small enterprises will enjoy full exemptions from company income tax and withholding tax, thereby reducing operating costs and enabling growth. Simplified tax processes further ease compliance, encouraging formalization and transparency. For larger businesses, the corporate income tax rate has been lowered from 30% to 25%. Additionally, the introduction of the Office of Tax Ombud will ensure swift resolution of disputes and protect taxpayers from arbitrary assessments. These are just a few of the benefits, and the Tax Reform Bill is truly focused on you, the Nigerian people. It ensures that Nigerians, from hardworking workers to small business owners, benefit from a more equitable and supportive tax system.
In addition to the proposed changes, President Bola Ahmed Tinubu has also demonstrated a clear intention to modernize the tax administration system. President Tinubu’s moves emphasize simplifying and making the tax process more transparent, while also protecting taxpayers’ rights. The government has been actively engaging with stakeholders, including the private sector, to ensure that the reforms align with the needs of businesses, especially small enterprises. The emphasis on reducing the corporate income tax rate from 30% to 25% is a clear indication of the government’s commitment to attracting both local and foreign investment. This reduction is expected to stimulate job creation, promote business growth, and ultimately enhance the economic environment.
Furthermore, the government has been working to harmonise tax policies across different states, aiming to eliminate overlapping levies that have historically hindered business operations. The bill now gives 60% of VAT revenue to the states where goods and services are consumed. This means states with more consumption will receive more funds, helping them improve services like roads, schools, and healthcare. With the bills, states will rely less on federal funding and have more control over their finances, allowing them to better meet the needs of their people and grow their economies. These actions underline the government’s dedication to creating a more investor-friendly economy.
In conclusion, Nigerian workers should be aware that the Tax Reform Bill will bring relief through reduced company income taxes, unlimited VAT input claims, and other reforms that will lower tax burdens and business costs. These changes will make businesses more profitable, enabling them to retain existing workers and create new jobs, driving expansion and promoting a more robust economy.
The Tax Reform Bill is a once-in-a-generation opportunity to reshape Nigeria’s economic sector in favour of its people. Nigerian workers deserve nothing less than the truth, and they deserve to see this bill implemented to realise its full potential.
_Arabinrin Aderonke Atoyebi is the Technical Assistant, Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service (FIRS)_
