The Presidential Fiscal Policy and Tax Reforms Committee has suggested changes to make taxes fairer for people with lower and middle incomes, while also creating a more progressive tax system for the richest individuals. These changes would mean that about 98% of Nigerian workers would pay less in taxes, with only the top 2% seeing a small increase, capped at 25% for very wealthy people.
People with low incomes, who make up about one-third of the workforce, would not have to pay any taxes at all, following the idea that people in poverty should not be taxed. Self-employed individuals and business owners would also get tax breaks similar to those who work for companies.
The proposed changes to Value Added Tax (VAT) would mean that essential items like food, healthcare, education, and transportation would have a 0% tax rate. These items are very important for many households, especially those with low incomes. This change is meant to help with the increasing cost of living.
Additionally, the committee is working to change taxes to make it easier for people to work from home. This will help young Nigerians join the worldwide digital economy by taking advantage of business process outsourcing jobs.
Unlike previous committees, this one has been given the job of actually putting these changes into action. This should lead to a more successful approach to improving the country’s finances, increasing income, and boosting economic growth.
