The administration of President Bola Ahmed Tinubu, GCFR, has once again demonstrated its commitment to alleviating the economic burden on ordinary Nigerians while fostering an environment conducive to business growth and national development. Under the visionary leadership of the President, a groundbreaking set of tax reforms has been introduced, aimed at simplifying Nigeria’s tax system, promoting equity, and stimulating economic growth.
Hon. Dahiru Hammandikko, National Coordinator and Convener of the Northern Region Supports Tinubu/Kashim, provided a detailed breakdown of these reforms, which are expected to transform the nation’s fiscal landscape.
1. Support for Small Businesses: Businesses with a turnover of less than ₦50 million are now exempt from paying taxes, allowing over 90% of small enterprises to focus on expansion and productivity.
2. Relief for Workers: More than 90% of public and private sector workers will no longer pay income tax, with individuals earning less than ₦1.7 million monthly enjoying significant reductions in their tax obligations.
3. Pro-Poor Policies: Over 82% of consumables typically patronized by low-income earners will be VAT-free, ensuring that essential goods remain affordable.
4. Abolition of Nuisance Taxes: Over 50 burdensome taxes previously imposed on local businesses have been scrapped, eliminating a key impediment to industrial growth.
5. Equitable VAT Distribution: VAT will now be calculated based on consumption locations rather than corporate headquarters, ensuring equitable revenue distribution across states.
6. Taxing the Wealthy: The reforms introduce higher tax rates for the wealthy while relieving the poor and vulnerable from tax payments altogether.
7. State Empowerment: Consumption tax collected by states has been abolished, while the Federal Government's share of VAT will reduce from 15% to 10%, leaving 90% of the proceeds to states and local governments.
8. Streamlined Tax Collection: Agencies such as Customs and NUPRC will no longer collect taxes. Instead, a single agency will oversee all tax collections nationwide, improving efficiency and transparency.
9. Income Tax Cuts: Individuals earning less than ₦9 million annually could see their income taxes slashed by up to 50%.
10. Simplification of Tax Laws: The reforms could lead to the repeal of multiple tax laws, such as the Stamp Duty Act, further reducing complexities for taxpayers.
11. VAT Gradual Increase: While VAT will gradually increase from 10% in 2025 to 15% by 2030, essential goods consumed by low-income earners will remain exempt, cushioning any potential impact on the vulnerable.
12. Ending Over-Taxation: With many Nigerian companies currently subjected to over 60 different taxes and levies, the reforms seek to eliminate this stifling practice and revitalize the industrial sector.
Hon. Hammandikko emphasized that these reforms are a testament to the Tinubu administration’s dedication to creating an inclusive and prosperous economy. He noted, “This is a bold move towards ensuring fiscal fairness and fostering sustainable development. The reforms will stimulate job creation, boost local industries, and enhance the well-being of all Nigerians.”
The initiative not only reflects the government's resolve to tackle systemic challenges in Nigeria's tax regime but also its commitment to providing relief to struggling citizens and empowering the private sector. As the nation anticipates the implementation of these transformative measures, hopes are high for a brighter economic future.
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