UPDATE: Tinubu Mulls Fresh Tax for Nigerians Earning N5m and Above

The federal administration, led by Tinubu, is thinking of implementing a new tax law that will increase taxes for anybody making N5 million or more a month. At an evaluation workshop on Thursday in Lagos, Mr. Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, disclosed this idea.

Oyedele claims that the government’s proposal would create a more progressive tax structure, meaning that those with higher earnings would pay more while those with lower incomes would receive some relief. He said that the personal income tax rate of Nigerians making less than N2 million a month might be lowered.

“We are proposing that the personal income tax rate should be reduced for anybody who is earning around N2 million per month or less but the personal income tax rate should be increased for anybody earning N5 million per month or more. Between N2 million and N5 million, your PIT rate would remain the same,” Oyedele explained.

Bola Tinubu Inaugurates Presidential Committee On Tax Reforms

He further highlighted the current issue with Nigeria’s tax system, where high earners are taxed at the same rate as middle-income earners. “In Nigeria today, if you earn N20 million per year, your tax rate is 19 percent. If you earn N1 billion monthly, your tax rate is the same. So our tax rate is not progressive,” he said.

The group continues to confer with state governors while ironing out the specifics of the new tax rates. Governors are very important since these changes will have a big effect on them.

The committee has recommended that the government set the customs import exchange rate at N800 per dollar in addition to the proposed tax increases. The existing exchange rate’s oscillations and volatility are intended to be stabilised by this action.

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