Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has described the proposed tax reform bills as the most pro-workers legislation in Nigeria’s history.
Oyedele’s remarks come in response to concerns raised by the Nigeria Labour Congress (NLC) regarding the impact of the bills on citizens’ welfare and the alleged lack of stakeholder involvement in the development process.
On Wednesday, the NLC called on the federal government to withdraw the bills currently before the National Assembly.
In a post on X (formerly Twitter) on Thursday, Oyedele clarified that the reforms are aimed at improving workers’ welfare and reducing the cost of living, noting that he believes the NLC would not intentionally oppose initiatives that benefit its members.
“We welcome the interest of the Nigeria Labour Congress (NLC) on the Tax Reform Bills. We note the concern expressed about the likely impact on the welfare of Nigerian workers,” Oyedele wrote.
“To clarify, we outline below some of the key provisions of the tax bills aimed at improving the welfare of workers:
“1. Lower taxes to enhance the disposable income of workers – a) Full exemption of low-income earners up to N1m p.a. (about N83k per month) representing about one-third of all workers in the private and public sectors from PAYE tax.
“(b) Reduced PAYE tax for workers earning up to N20m p.a. (about N1.7m per month) benefiting additional 60% of all workers.
“(c) PAYE tax exemption for members of the armed forces fighting insecurity in addition to other ranks.
“2. Measures to reduce the cost of essential items – a) Zero (0%) VAT on food, healthcare, and education representing about 60% of all consumptions.
“(b) VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, and fuel products representing over 20% of all consumptions.
“These items constitute an average of 82% of household consumption and nearly 100% for low-income earners to ameliorate the rising cost of living for workers.”
Oyedele also said in the proposed reforms, tax is exempted for 97 percent of small and medium enterprises (SMEs), and stamp duties on rent below N10 million as part of the perks for workers.
He said the proposed bills make provisions for incentives to stimulate employment opportunities for workers, including “tax incentives for employers to hire more workers”.
“(b) Friendly tax rules to attract remote work opportunities for Nigerians,” he added.
“(c) Tax exemption for 97% of SMEs, harmonisation and reduction of corporate tax rates for large businesses to stimulate growth and create more employment opportunities for workers.”
Oyedele said the tax bills can be further improved through robust debates and engagements, which can take place as part of the ongoing legislative process.
He said the committee looks forward to more opportunities to discuss specific areas for improvement in the bills to better serve the interests of all Nigerians, including workers.
