We Will Collect 25% Tax From Nigerians Earning Above N100m – FG
Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reform, said that if the new tax bill is passed by the National Assembly, wealthy Nigerians with monthly incomes over 100 million will face a 25% personal income tax rate.
He said that 90% of current taxpayers are those who should not be taxed and advocated for a more rational and equitable tax system in the country.
The remarks were made during a breakout session of the 30th Nigerian Economic Summit organized by the Nigerian Economic Summit Group and the Ministry of Budget and National Planning in Abuja on Monday.
Oyedele stressed the need to balance the need to reduce the tax burden on low-income earners with the need for the wealthy to contribute more to government revenue.
“If you earn N100m a month, we are taking up to 25 per cent from the rich people. That’s because we need to balance the books,” Oyedele stated.
The fiscal policy expert stated that the government is ready and determined to ensure that the appropriate individuals pay their taxes, and that his committee is working aggressively to achieve its goals.
He also stated that if the bill is passed, it is expected to take effect in January 2025.
Chairman Oyedele said that middle-income earners with monthly incomes of less than $1.5 million will see their personal income tax burden decrease, while for those with higher incomes, the tax rate will increase in stages, eventually reaching 25%. Low-income earners will be exempt from all personal income tax.
The reform also aims to reduce the tax burden on businesses.
He noted: “Today, whatever VAT you (businesses) pay on assets—whether you’re building a factory, buying a laptop, or vehicles—you bear it. This increases your cost, and therefore, your pricing will go up. Once our reforms are implemented, you get the credit back 100 percent on services and assets.”
“People will pay tax once we decide that they have to pay. What we realize is that almost 90 per cent of people who are paying taxes are those who should not have been paying in the first place,” he said.
“So that’s where we came up with the data that 97 per cent of the informal sector should be formally exempted from taxes. People do not understand where we are coming from. They’re not the ones to pay taxes. They’re just trying to survive.”
