The Senate will today, Wednesday begin the consideration and possible passage of the Tax Reform Bills.
Senate President Godswill Akpabio made this known during Tuesday’s plenary as lawmakers returned from their Sallah and Easter break.
According to reports, the bills which include the Nigerian Tax Bill, Tax Administration Bill, Revenue Tax Board Bill, and the Nigerian Revenue Service Establishment Bill, were submitted to the National Assembly six months ago by President Bola Ahmed Tinubu as part of his administration’s broader efforts to reform Nigeria’s tax system and strengthen revenue collection.
The House of Representatives had already passed the bills two weeks earlier, raising expectations and putting pressure on the Senate to act swiftly. The legislation is expected to overhaul the current tax structure and improve economic conditions, especially for low-and middle-income earners.
Dr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has highlighted key provisions in the bills, saying they are designed to boost workers’ welfare and encourage economic growth.
One of the major proposals is the full exemption from PAYE (Pay As You Earn) tax for Nigerians earning up to ₦1.3 million annually, which is about ₦108,000 monthly. This move, according to Oyedele, will benefit at least 35 per cent of Nigerian workers across public and private sectors.
The bills also propose reduced PAYE tax rates for those earning up to ₦20 million per year, which would positively affect an additional 60 per cent of the workforce. Personnel in the armed forces are expected to enjoy complete tax exemptions, a policy designed to support national security efforts.
To ease the cost of living, the bills introduce Value Added Tax (VAT) exemptions on items that form the bulk of household spending such as food, healthcare services, education, rent, transportation, baby products, sanitary towels, renewable energy, compressed natural gas (CNG), and fuel.
These categories represent about 82 per cent of average household spending and nearly 100 per cent for low-income earners. The tax reliefs are intended to ensure that vulnerable citizens are protected from inflation and rising costs.
Other worker-friendly features in the bills include tax-free wage awards and transport subsidies, the removal of bureaucratic delays in salary increases, and caps on taxable non-cash benefits to help employees retain more of their income. There are also VAT and stamp duty exemptions on rent and real estate purchases, especially for properties below ₦1 million.
Employers are expected to benefit from tax incentives for hiring more staff and creating international remote work opportunities for Nigerians.
SOURCE: Deboemman