FG: Nigeria’s tax reform bills to ease cost-of-living and boost workers’ disposable income 

In a statement, Oyedele explained that lower taxes would significantly increase disposable income for Nigerian workers, particularly through the full exemption from Pay As You Earn (PAYE) tax for employees earning up to N1.3 million per annum (over N100,000 monthly).

This measure, he noted, would benefit at least 35% of all workers in both the public and private sectors.

Furthermore, the reform bills reduce PAYE tax rates for those earning up to N20 million per annum (approximately N1.7 million monthly), impacting an additional 60% of Nigerian workers.

Members of the armed forces will also receive full PAYE tax exemptions, reinforcing government support for security personnel.

Oyedele outlined major VAT exemptions designed to reduce the cost of essential goods and services.

The new tax provisions eliminate VAT on food, healthcare, and education, covering about 60% of all consumer spending.

Additionally, exemptions extend to rent, transportation, renewable energy, compressed natural gas (CNG), baby products, sanitary towels, and fuel, representing over 20% of total household consumption.

“These measures ensure that workers, especially low-income earners, are shielded from the rising cost of living,” Oyedele stated, adding that the exempted items collectively account for an average of 82% of household spending, and nearly 100% for low-income earners. 

The reform bills also introduce tax breaks for wage awards and transport subsidies, easing financial burdens for low-income workers. Bureaucratic restrictions on wage increases have been removed, making salary adjustments more efficient.

Oyedele further revealed that the new tax provisions cap taxable benefits-in-kind, ensuring that workers retain more earnings.

Additionally, the bills promote affordable housing through VAT exemptions on rent and real estate purchases, along with stamp duty exemptions on rental payments below N1 million.

Employers will benefit from tax incentives to hire more workers, alongside friendly tax structures designed to attract international remote work opportunities for Nigerians, fostering global employment prospects.

“These changes deserve to be supported by everyone who seeks the well-being of Nigerian workers,” Oyedele stressed. “We believe that the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) will not intentionally work against the interest of their members.” 

The new tax regime aims to propel Nigeria’s economy, create a more favorable business environment, and protect workers from financial strain.

With the anticipated passage of the tax reform bills, Nigeria is poised to strengthen economic resilience, improve workers’ welfare, and enhance employment opportunities, ensuring a more equitable financial landscape for all.

With the anticipated passage of the tax reform bills, Nigeria is poised to strengthen economic resilience, improve workers’ welfare, and enhance employment opportunities, ensuring a more equitable financial landscape for all.