By Faith Adama
To bring much-needed relief to millions of Nigerians, the Senate has passed the eagerly awaited Tax Reform Bills, exempting individuals earning below N1 million annually from personal income tax.
The reform, which was approved today, is hailed as a major win for low-income earners and is aimed at lightening the financial burden on Nigerians struggling with the rising cost of living.
The tax overhaul, spearheaded by the Federal Government, is part of a broader effort to create a more equitable tax system that favors prosperity, not poverty.
Experts, including Tanimu Yakubu of the Budget Office and Zacch Adedeji of the Federal Inland Revenue Service (FIRS), presented the reform to lawmakers, emphasizing its potential to support small businesses and ensure a more efficient tax administration.
Key to the reform is the exemption of Nigerians earning less than N1 million annually from income tax, a move designed to shield the most vulnerable from financial strain.
“We are currently taxing people who earn as little as N30,000 a month—less than N1,000 a day,” said Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
“This new threshold will provide vital relief to those struggling to make ends meet.”
The reform also addresses concerns about the unequal distribution of Value Added Tax (VAT) revenues, with the new system promising a fairer allocation based on consumption levels rather than the economic weight of states like Lagos.
With initial resistance from some lawmakers, the passage of the reform was secured after thorough deliberations, ultimately leading to bipartisan support.
Senators expressed optimism that the bills, which also introduce measures like tax exemptions for loss-making companies and a 15% tax rate for large corporations, will strengthen Nigeria’s economy and improve living standards.
These reforms are set to have a profound impact on the Nigerian economy, promoting investment, reducing inequality, and providing a fairer tax system for all citizens.
The new laws are expected to be enacted soon, bringing hope for a brighter financial future for low-income earners across the nation.
