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Nigeria New Tax Laws: What You Need to Know

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President Bola Tinubu on Thursday signed four new tax laws aimed at modernising and streamlining the country’s tax system.

In the new tax law, the Value Added Tax rate remains at 7.5 per cent despite initial proposals to increase to 12.5 per cent, but its scope is expanded.Essential items—such as food, education, healthcare, public transport, residential rent, and exports—are zero-rated to ease inflationary pressure.

For revenue allocation is restructured: now 30 per cent of VAT proceeds are distributed based on consumption (rather than contribution), 50 per cent equally among states, and 20 per cent to population-based allocation.

With the latest development, it is expected that state revenue streams will increase, and it will also discourage tax evasion.

Overview of the four new lawsNigeria Tax Act:

Consolidates various tax rules into a single, simplified code, eliminating over 50 small, overlapping taxes. This reduces complexity and duplication, making it easier for businesses to comply.

Tax Administration Act:

Establishes uniform rules for tax collection across federal, state, and local governments, ensuring consistency and reducing administrative conflicts.

Nigeria Revenue Service Act:

Replaces the Federal Inland Revenue Service with the independent Nigeria Revenue Service, aiming for greater efficiency and autonomy in tax administration.

Joint Revenue Board Act:

Enhances coordination between different government levels and introduces a Tax Ombudsman and Tax Appeal Tribunal to handle disputes fairly.

Key objectives of the new tax rules

Simplify Tax System:

Reduces bureaucratic hurdles and overlapping taxes to make compliance easier, especially for small businesses and informal traders.

Increase Revenue Efficiency:

Aims to boost Nigeria’s tax-to-GDP ratio from 10% (below the African average of 16–18%) to 18 per cent by 2026 without raising taxes on essential goods.

Reduce Financial Burden:

Provides relief for low-income households and small businesses while ensuring high-income earners and luxury consumers contribute more.

Fund Public Services: Increased revenue will support infrastructure, healthcare, and education, reducing reliance on borrowing.Who benefits and how

Low-Income Households:

Individuals earning up to ₦1 million ($650) annually receive a ₦200,000 rent relief, reducing taxable income to ₦800,000, exempting them from income tax.

VAT exemptions on essential goods and services (food, healthcare, education, rent, power, baby products) lower living costs.

Small businesses:

Businesses with an annual turnover below ₦50 million ($32,400) are exempt from company income tax.

Simplified tax filing without requiring audited accounts reduces compliance costs.

Large businesses:

Corporate tax rates drop from 30 per cent to 27.5 per cent in 2025 and 25 per cent thereafter.Tax credits for VAT paid on expenses and assets allow businesses to recover the 7.5 per cent VAT.

Charitable, educational, and religious organisations:

Tax incentives for non-commercial earnings, encouraging community-focused activities.

Impact on different groups

Low-Income Earners:

Benefit most from income tax exemptions and lower costs for essentials, increasing disposable income.

Small Businesses and informal traders:

Simplified rules and tax exemptions encourage compliance and reduce financial strain, potentially formalising more businesses.

High-income earners and luxury consumers face higher VAT on luxury goods and premium services, plus capital gains tax on large share sales.

Government: Expects increased revenue for public services without overburdening vulnerable citizens.

Why reforms were needed:

Nigeria’s tax system was outdated, inefficient, and disproportionately harsh on low-income groups.

The low tax-to-GDP ratio (10%) limited funding for critical services like healthcare and infrastructure.

Overlapping taxes and complex rules deterred compliance, especially among small businesses and informal traders.

Public and expert reactionsPositive sentiment:

Small business owners welcome tax exemptions but seek clarity on enforcement to avoid unexpected levies.

Low-income earners appreciate relief on essentials but remain cautious about implementation.

Taiwo Oyedele, head of the Presidential Fiscal Policy and Tax Reform Committee, claims 90% public support, emphasising that success depends on awareness and trust.

The reforms align with Tinubu’s administration’s goal to reduce economic inequality and boost fiscal capacity without overburdening citizens.

By encouraging voluntary compliance and reducing reliance on loans, Nigeria aims to strengthen its economy and fund development projects.

These reforms mark a significant step toward a fairer, more efficient tax system, with a focus on supporting vulnerable groups while fostering economic growth.

However, their success hinges on transparent enforcement and public trust.

For further details, you can refer to official statements from the Nigerian government or credible news sources covering the reforms.

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Ambassadors Screening: Senate Clears Lateef Kayode, Kolawole Are, and Amin Dalhatu

The nominees Rtd. Col. Lateef Kayode Kolawole Are (Ogun), Amb. Amin Muhammad Dalhatu (Jigawa), and Amb. Emanuel Ayodele Oke (Oyo) were collectively described as credible assets capable of strengthening Nigeria’s diplomatic and strategic engagements.

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The Senate Committee on Foreign Affairs have thoroughly screened three ambassadorial nominees forwarded by President Bola Ahmed Tinubu, and gave them a clean bill of health.

Those who have been screened are :

Rtd. Col. Kayode Are : He offered a detailed overview of his extensive career in national intelligence and security, highlighting his distinguished roles in the Nigerian Army, as former Director-General of the State Security Service, Deputy National Security Adviser, and his continued contributions to security reforms.

Amb. Amin Muhammad Dalhatu : He recounted his longstanding service in the Federal Ministry of Finance and NNPC, his transition into agriculture, and his successful tenure as Nigeria’s Ambassador to South Korea between 2016 and 2021, a period that strengthened his diplomatic acumen.

Ambassador Ayodele Oke, a seasoned diplomat and intelligence professional, presented a rich 38-year service history across six countries on three continents. With academic qualifications in political science, international relations, law, and international criminal law, along with advanced training in reputable international institutions.

He addressed concerns regarding past intelligence-related allegations, noting that all issues had been conclusively resolved following official reviews.

Niger North Senator and Chairman of the Committee, Senator Abubakar Sani Bello, who presided over the Wednesday screening exercise, said that the Committee expressed unanimous satisfaction with the calibre of the candidates and applauded the President for presenting individuals of notable experience and merit.

The Committee, empowered to scrutinise the competencies and suitability of the non-career nominees, conducted an in-depth engagement attended by over a dozen senators.

The session featured rigorous interrogation, professional assessments, and broad deliberations focusing on each nominee’s track record, capacity, and character.

At the conclusion of the exercise, the Committee expressed unanimous satisfaction with the calibre of the candidates and applauded the President for presenting individuals of notable experience and merit.

Members observed that all three nominees possess robust professional backgrounds, diverse national service credentials, and the temperament required for high-level diplomatic assignments.

They commended the President for identifying individuals whose experience aligns with Nigeria’s evolving global priorities.

Upon completion of the screening, Senator Sani Bello presented the nominations for the Committee’s decision, and members unanimously endorsed all three nominees for Senate confirmation.

The nominees Rtd. Col. Lateef Kayode Kolawole Are (Ogun), Amb. Amin Muhammad Dalhatu (Jigawa), and Amb. Emanuel Ayodele Oke (Oyo) were collectively described as credible assets capable of strengthening Nigeria’s diplomatic and strategic engagements.

The Senators in attendance included Senators Henry Seriake Dickson (Bayelsa West), Mohammed Sani Musa (Niger East), Orji Uzor Kalu (Abia North), Mukhail Tokunbo Abiru (Lagos East), Ali Ndume (Borno South), Ikra Aliyu Bilbis (Zamfara North), :Salisu Shuaib Afolabi (Ogun Central), Peter Ndalikali (Niger South), Ahmed Aliyu Wadada (Nassarawa West) among others

The Senate Committee on Foreign Affairs, under the leadership of Senator Abubakar Sani Bello, will resume the screening of the remaining ambassadorial nominees at a subsequent date.

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Defence Minister, Gen Musa calls for ban on ransom payments to terrorists

General Musa told the lawmakers that the government at all levels must enforce a total ban on ransom payments and negotiations with terrorists, warning that such actions only empower criminals.

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The Minister of Defence, Gen. Christopher Musa has said that the payments of ransom to terrorists in the country is ineffective to combat terrorism

General Musa stated this yesterday, during his screening as minister by the Senate.

General Musa told the lawmakers that the government at all levels must enforce a total ban on ransom payments and negotiations with terrorists, warning that such actions only empower criminals.

“There is no negotiation with any criminal. When people pay ransoms, it buys terrorists time to regroup, re-arm and plan new attacks. Communities that negotiated still got attacked later,” he said.

He stated that Nigeria’s fight against insecurity would remain ineffective until the country established a unified national database that captured every citizen and linked all security, banking and identity systems together.

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Benue IDPS Reclaim Their Ancestral Land after 14 Years of Attacks

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Thousands of internally displaced persons in Benue State have started returning to their ancestral homes after more than 14 years of forced exile caused by repeated attacks by armed Fulani herdsmen.

Communities in Gwer West Local Government Area, including Tse Akpiti, Igbafu, Zwatem in Mbakyoudu district, Abiam in Sengev, Gidan Pepa, and New Nigeria, are witnessing a gradual but steady return of their original inhabitants.

Residents told journalists that farming and commercial activities have resumed without fear, with yam, rice, and cassava harvesting currently in full swing across the once-abandoned farmlands.

A resident of Agberagba, Semon Gyundu, said: “We never believed we would step foot here again. The journey back looked impossible, but today we are farming and sleeping in our fathers’ compounds without panic.

”Another returnee from Abiam community, Jimmy Nyor, expressed gratitude to “our son who is complementing government efforts,” adding that normal life has returned and they can only get better with more support.

Leading the resettlement drive is the National President of the Tyoshin Development Association (TDA), Chief Tiza Timothy Tarnongo, who has been mobilizing indigenes and partnering with the state government.

Chief Tarnongo appealed to both the Benue State Government and humanitarian organizations to urgently rebuild destroyed schools, health centers, boreholes, and roads to encourage more displaced families to return permanently.

With sustained collaboration between the state government, community leaders, and aid agencies, there is growing optimism that many more IDPs across Gwer West and other affected local government areas will soon reclaim their ancestral lands without fear of further attacks.

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