The Nigerian Federal Government will offer tax breaks to companies that increase their workforce as part of the Inflation Reduction Act. Announced by Finance Minister Wale Edun, the incentives include import duty exemptions and VAT reductions, aimed at mitigating inflation impacts and supporting business operations.
In a bid to stimulate job creation and address rising operational costs, the Nigerian Federal Government is set to offer tax breaks to companies that expand their workforce. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced this initiative during an interview on AIT. The tax incentives will be integrated into the upcoming Inflation Reduction Act, which will also include measures such as import duty exemptions and VAT reductions.
Edun explained that companies hiring additional staff will benefit from tax deductions, credits, or exemptions, aiming to ease the financial burden on businesses affected by fluctuating foreign exchange rates and other inflationary pressures. This move is part of a broader strategy to mitigate the impacts of a soaring inflation rate, which reached 34.19% in June 2024.
The executive order outlining these tax breaks, along with other fiscal incentives like VAT exemptions on certain items and removal of withholding tax for various sectors, is expected to be signed by the President within the next two weeks. This policy is designed to counteract the high costs associated with importing and processing raw materials and to support small and medium-sized enterprises.
Edun emphasized that these measures are essential for alleviating the economic strain on companies and boosting employment in the face of a challenging economic environment.
Reactions: The announcement has been met with cautious optimism among business leaders, who view the tax breaks as a positive step toward easing financial pressures. However, some are concerned about the effectiveness of these measures in addressing the broader economic challenges.
