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Oyedele: Presidential Committee Proposes Exemption of 95% of Informal Sector from Taxes

The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC), established by President Bola Tinubu, has hinted at plans to revolutionize Nigeria's tax system by exempting 95% of the informal sector from all taxes. Chairman Taiwo Oyedele emphasized that the move was aimed at reducing the burden of multiple taxation on small businesses and low-income individuals. He argued that the informal sector should not be over-burdened with taxation but rather supported to grow economically to fit into more affluent categories before imposing taxes on them.Oyedele also noted that those earning between N25 million and less annually should be exempted from paying all forms of taxes, including income and value added tax (VAT). The committee is using data to inform its decisions, and the proposal for tax reforms is expected to be submitted to the National Assembly by the third quarter of this year.The committee is currently consulting with the private sector, with internal approvals expected by the end of June. Executive orders and regulations, such as the new withholding tax regulation exempting small businesses, are ready for implementation and await the Minister's signature. A new National Tax Policy, Spending Policy, and Borrowing Policy will be introduced before the end of the year, while Constitutional amendments are expected in 2025 and 2026, aligning with the National Assembly's two-year timeline.Oyedele said the administration is reforming the country's tax system to reduce the burden of multiple taxation on small businesses and low-income individuals.

Elumoye Deji | Economy/Tax | ThisDay Newspaper | Monday, May 13, 2024