13 things to know about Tinubu’s tax reform bill

The tax reform bill proposed by President Bola Tinubu before the National Assembly seeks to promote equity, fairness and inclusiveness in the new tax regime when passed into law.

The tax reform bill contains 13 crucial elements highlighted below.

1. Changes to the income tax laws to facilitate remote work opportunities for Nigerians in Nigeria with the global business process outsourcing. This will empower the youths to play a key role in the digital economy space.
2. Zero rated VAT and other incentives to promote exports in goods, services, and intellectual property.
3. Tax exemption for small businesses including WHT, VAT, and 0% CIT.
4. Exemption from personal  income tax for minimum wage earners and reduced tax burden for over 90% private and public sector workers.
5. VAT at 0% for food, education, health, and exemption for rent and public transportation. These items constitute an average of 82% of household consumption and nearly 100% for low income households to ameliorate the rising cost of living for the masses.
6. Introduction of the Tax Ombudsman to advocate for improved tax system and project vulnerable taxpayers.
7. Reduction of corporate income tax rate from 30% to 25% over the next 2 years and elimination of earmarked taxes on companies to be replaced with a harmonized single levy at a reduced rate.
8. Elimination  of minimum tax on loss-making companies and those with low margins.
9. Grant of input VAT credit to businesses on assets and services to reduce cost of investment and improve competitiveness.
10. Redesign of the personal income tax band and rates. VAT and Capital Gains Tax  to be progressive while protecting the poor.
11. Proposal for repeal over 50 nuisance taxes and levies, and harmonize the remaining taxes to a single digit.
12. Rationalization of tax incentives to reduce uncertainty and provide Equitable basis for VAT revenue sharing to ensure that states without many headquarter companies are fairly treated and recognized for their economic contributions level playing field for all investors.
13. A new National Fiscal Policy  to set the framework for fair taxation, responsible borrowing and sustainable spending.

Tax Reform Bill of Tinubu