The Senior Special Assistant to the President on Community Engagement, Abdullahi Tanko Yakasai, has hosted a roundtable discussion to highlight the benefits of the Tax Reform Bill 2024, recently passed by the National Assembly.
The event, held at the Avenue Event Centre in Kano city, focused on the four key components of the bill: the Nigeria Tax Bill, Nigeria Revenue Service (Establishment) Bill, Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.
Yakasai explained that the reform aims to overhaul Nigeria’s fiscal framework by simplifying tax administration, boosting revenue generation, improving compliance, and fostering sustainable economic growth.
“Many benefits are anticipated, particularly for individuals and small and medium-sized enterprises (SMEs).
“Some of the benefits of the Reforms include: harmonization of tax structure to avoid multiple taxes, more objective and fair assessment of taxes from entities, lower taxes low and middle income earners.
“Other benefits include Full exemption and reduced Pay As You Earn (PAYE) tax for workers earning up to N1.3 million per annum and workers earning up to N20 million per annum, this, benefiting a large percentage of workers,” he said.
Commending the Executive Chairman of Federal Inland Revenue (FIR), Dr. Zacch Adedeji, he explained that the tax reform will reduce the cost of living, as there will be zero Value Added Tax (VAT) on essential items like food, healthcare, and education, which constitute a large portion of household consumption.
“It’s important to note that the full impact of these reforms will depend on their effective implementation and how they interact with existing economic conditions.
“While the intent is to create a more equitable and efficient tax system, ongoing adjustments and monitoring will be crucial,” Yakasai said.
Other speakers who shedded light on the topic spoke VAT exemption on rent, transportation, renewable energy, Compressed Natural Gas (CNG), baby products, sanitary towels, and fuel products.
“These measures aim to cushion the impact of rising costs, especially for low-income earners,” Dr. Umar K. Shehu said.
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According to him, the Nigerians will also benefit from enhanced disposable income, by reducing direct and indirect tax burdens.
“The bills contain provisions for tax breaks on wage awards and transport subsidies for low-income earners, and removal of bureaucratic approvals for wage awards.
“There will be tax waivers to promote affordable housing, VAT exemption on rent and acquisition of real property, and exemption of stamp duties on rent below N1 million.
“Other benefits include rent relief, to replace Consolidated Relief Allowance, allowing employees to claim 20% of annual rent paid.
“Essential items such as food, education, healthcare will enjoy 0% Value Added Tax (VAT) while rent, public transportation, and renewable energy have been exempted.
“Businesses will be granted tax credits for VAT paid on their assets and all expenses incurred to produce Vatable goods and services.
“The reforms aim to simplify tax laws and reduce the burden on taxpayers, making it easier for businesses to comply.
“Others include stimulate employment opportunities, reduced production costs, maximised capital allowances for SMEs with minimal non-taxable income to claim full capital allowances.
“The reforms seek to broaden the tax base and improve tax administration, reduced tax evasion, leading to increased government revenue. This revenue can then be used to fund infrastructure, social programmes, and public services,” Shehu said.