The Chairman of the Presidential Committee on Fiscal Policy, Taiwo Oyedele, has announced significant proposals aimed at easing the financial burden on Nigerians by recommending the removal of taxes on essential items such as food, public transportation, house rents, education, and healthcare.
This move, according to Oyedele, is intended to make these necessities more affordable and accessible to the general population.
“What we have taken into account is what are those necessities of life—food, accommodations, transportation, education, and health. We’ve deliberately identified those items. And we’ve removed almost all the taxes applicable to them, including no VAT,” Oyedele stated during an interview on Channels Television’s Politics Today program
He emphasized that the proposal, which includes the exemption of value-added tax (VAT) on these critical items, is currently being reviewed and is expected to be signed by President Bola Tinubu before it is sent to the National Assembly to be enacted into law.
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“We think that from the fiscal policy and tax perspective, we can make it more affordable for the Nigerian people to be able to afford those necessities. Share-passenger transportation is completely tax-free,” Oyedele explained.
Oyedele further clarified that while public transportation, such as buses, would be exempt from taxes to benefit the lower-income population, services like taxi hires would still be subject to tax.
He stated, “However, if you hire a taxi, we assume that you’re not the poorest Nigerian, so you have to pay the tax. Whereas if you get into a bus, that will be completely tax-free. That’s what we’ve done so far.” This differentiation aims to ensure that the tax relief is targeted at those who need it most.
In addition to these measures, Oyedele mentioned that the committee’s recommendations also aim to streamline the tax system to reduce the cost of doing business in Nigeria and enhance compliance.
“We’ve proposed full input VAT credit for businesses to reduce their cost of doing business and minimize the strain on their cash flows. We also recommended the harmonization of all consumption taxes into one (VAT only) and an adjustment of the revenue-sharing formula in favor of states,” Oyedele added.
This approach seeks to simplify the tax landscape, making it easier for businesses to operate and comply with tax regulations, while also reducing the administrative burden on the government.
The committee has also suggested reducing the company income tax rate and increasing the exemption threshold for personal income tax to further alleviate the tax burden on individuals and businesses alike.
These proposals are part of a broader strategy to promote economic growth by creating a more business-friendly environment
