By Adedapo Adesanya
Nigeria is seeking to slam a 25 per cent personal income tax on the country’s wealthy class in the latest move towards an aggressive tax regime that will increase the tax base and dwindling revenue.
Mr Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, announced this during the 30th Nigerian Economic Summit (NES) conference in Abuja on Monday.
Business Post reports that the federal government has already forwarded the tax bills to the National Assembly for deliberation.
The new law will take effect in January 2025, reducing the tax burden on low-income earners while imposing higher taxes on the wealthy.
“Many people don’t like to pay taxes, but they often fail to realize that those taxes will eventually benefit them,” Oyedele said.
“We have been very intentional about reducing the tax burden on businesses. For instance, today, whatever VAT you pay on assets—whether you’re building a factory, purchasing a laptop, or buying vehicles—is borne entirely by the business. This increases your costs, which in turn raises prices. However, with our reforms, you will receive a 100 per cent credit on services and assets.”
“Additionally, your corporate income tax rate will be reduced from 30 per cent to 25 per cent, which is significant. These bills are currently with the National Assembly, and we plan to implement them from January 2025.”
On personal income tax, Mr Oyedele noted, “Those in this room may not appreciate this because there are wealthy individuals present. If you earn 1.5 million Naira a month, your personal income tax bill will decrease. Those at the lower end will be completely exempt.
“However, for those earning more, the rate will increase incrementally, reaching 25 per cent for the highest earners. Today, if you earn 100 million naira a month, few are paying the effective 19 per cent personal income tax rate. We are raising this to 25 per cent for the wealthy, which is crucial.”