The Chairman of the Presidential Fiscal Policy and Tax Reform Committee, Mr. Taiwo Oyedele, announced on Monday that under a new tax bill being considered by the National Assembly, wealthy Nigerians earning N100 million and above monthly would face a 25 per cent personal income tax rate.
Speaking at the Nigeria Economic Summit, Oyedele emphasized the committee’s intention to reduce taxes for corporate entities while ensuring that high earners contribute more to government revenue.
The proposed changes are expected to take effect from January 2025 if approved by lawmakers. Middle-income earners making N1.5 million or less per month will see decreased personal income tax obligations, while higher earners will face increased tax rates, eventually reaching 25 per cent. Lower-income earners will be exempt from personal income tax.
The reforms also include a drop in corporate income tax rate from 30 per cent to 25 per cent, as well as reductions or eliminations of VAT on essential goods and services such as food, health, education, accommodation, and transportation.
While some sectors may see increased VAT rates, Oyedele emphasized that removing unnecessary tax incentives could benefit the economy without sacrificing government revenue. He also highlighted the impact of inflation on the population’s purchasing power.
In addressing concerns over tax incentives and waivers, Oyedele argued that indiscriminate incentives harm the economy and that removing unnecessary incentives could relieve the business sector without costing the government revenue.
“We cannot give all the incentives you are asking for. We think the biggest low-hanging fruit is removing these incentives, and that’s exactly what we are doing,” Oyedele concluded.
