The Federal Government has said some categories of income earners have been exempted from paying personal income tax. The Chairman of the Presidential Committee on Tax Reform, Taiwo Oyedele, said the exemption for some salary earners covers both workers in the public and private sectors and the self-employed citizens......Read The Full Article>>.....Read The Full Article>>
Oyedele said this while speaking on how the new Withholding Tax Policy would help to address the economic hardship faced by small businesses and households, during AIT Money Line programme, on Tuesday.
He disclosed that Nigerians who make more than five million naira a month would have to pay more tax. He explained that businesses that have turnaround of ₦25 million would not have to pay withholding tax. He added that his committee hopes to increase the rule from ₦25 million to ₦50 million through the National Assembly.
“In the new withholding tax regulation, we have created exemption for small businesses. They do not have to worry about withholding tax. if your turnaround is within N25 million, you would have to worry about withholding tax. We are trying to raise that to N50 million. We have drafted a report on that and it will get to the National Assembly very soon.
“We also have exemption for income earners, including employees, both in the organized private sector, public and those who are self-employed. So our proposal is if you earn a certain amount of income, you should not have to pay any tax, in terms of personal income tax, because you need to take care of your household, which by data, the average is about five. You need to think about what two people (husband and wife) must earn to take care of five people,” he said.
Oyedele further clarified that the increase in minimum wage did not affect the new tax policy. He said the Presidential Committee on Tax Reform took into consideration the new minimum wage. He said the new tax policy prioritized poor households and multidimensionally poor Nigerians by removing taxes that affect food and health.
“We factored the minimum wage. Even beyond minimum wage, we think that people that earn more than minimum wage, their tax burden should come down because the cost of living has gone up.
“People who are not poor, who make a lot of money, if you make more than five million naira a month, you pay more, because we have to fund the people at the basic.
We also have to look at the basic consumption, from food to health and we have reduced the the taxes on those. So overall, yes we prioritized businesses, households to protect them, including those who are multidimensionally poor,” he added.
