By Chijioke Kingsley
Abuja (Sundiata Post) – A former National President, Youth Wing of the Christian Association of Nigeria, (YOWICAN), and Co-Chairman of the Interfaith Coalition Conference, Engr. Daniel Kadzai, has given an insight on the positive influence of the new tax reforms on Small and Medium Enterprises (SMEs).
The new tax reforms are aimed at addressing the nation’s tax system’s gridlocks such as multiplicity of taxes, fragmentation of revenue administration, and issues with the excessive tax burden on most vulnerable citizens, including small businesses and low-income earners, Kadzai said.
The bills, when passed into law, are expected to exempt low-income earners from Pay As You Earn (PAYE), reduce PAYE tax for those earning a monthly salary of N1.7 million or less, and keep value added tax (VAT) on food, healthcare, education, electricity generation and transmission at zero percent, our correspondent reports.
It will also ensure VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, rent, fuel products, tax break for wage award and transport subsidy to low-income earners. It will as well provide tax incentives for employers to hire more people incrementally than in the previous three years, this medium can report.
Speaking with Kadzai on the impact of the bill when passed into law, he said it will definitely shape the 2025 economy and beyond.
According to him: “A business person does not need the tax authority or government permission to claim their VAT. Once you pay VAT and you have the invoice on your own at the end of the month, you deduct that VAT from the VAT that you need to pay.
“Other benefits include: exemption of stamp duties on rent below N10 million, PAYE tax exemption for other rank and armed forces fighting insecurity, friendly tax rules for remote workers and digital nomads, as well as clarity on taxation of digital assets to avoid double taxation and allow deduction for losses
“For small businesses, the law is expected to ensure tax exemption threshold for small businesses with annual turnover of N25 million to N50 million, exemption from company income tax for small businesses (tax at 0%), and zero withholding tax deduction on business income of small businesses.
“High income earners will also benefit from the bill when passed into law, as it seeks VAT exemption on purchase of real estate, clarity on taxation of benefit in kind and limit of taxable accommodation benefit to 20 percent of annual income, with an exemption of tax on sale of shares up to N150 million and gains not exceeding N10 million.
“For the states which produce more zero-VAT-rated products, he emphasised that companies paying tax by consumption data will not affect them as the goal is to make Nigeria produce more than it consumes”.
He continued: “The tax reforms will be collecting both consumption data and production data so that nobody is disadvantaged as a result of producing goods that are considered exempt or zero-rated”, Kadzai said.
