The Digest:
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Dr. Taiwo Oyedele, has announced that 98% of Nigerians will see their personal income taxes slashed or eliminated. According to Vanguard, this policy aims to protect low earners of economic hardship, representing a fundamental shift in the nation's approach to taxation.
Key Points:
- The new policy exempts the lowest 33% of earners and reduces rates for those up to the 98th percentile.
- Only the top 2% of high-income earners will see a tax increase under the new regime.
- A monthly income threshold of ~₦200,000 per household was established as the poverty line for exemptions.
- Corporate tax will be reduced from 30% to 25% to encourage business formalization.
- Small companies with an annual turnover of ₦100 million or less will pay 0% corporate tax.
- The reforms aim to close the tax gap by combating evasion and correcting policy incentives.
- Oyedele argued that the old system unfairly penalized formal businesses compared to informal operators.
Sources: Vanguard
