The Chairman Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has disclosed that the new tax policy approved by President Tinubu has been forwarded to the National Assembly to be passed into law.
Oyedele said the new withholding tax policy was a new draft and not an amendment of the old law which he said was inherited from colonial past.
He disclosed that efforts are on to ensure implementation commences before December 2024.
He said the goal of drafting a new tax policy and not relying on amendment was to ensure clarity and avoid conflicting taxes.
“We took the view that amending outdated laws inherited from our colonial past was insufficient. Instead, we drafted new laws entirely.
“Our goal is to ensure clarity and avoid the suffering caused by conflicting taxes such as VAT and state-level consumption taxes,” he said.
Oyedele, who condemned Value Added Tax (VAT) on food items, healthcare, housing, education and transportation, said the new tax policy exempted the items listed above for taxation.
He said over 130 million Nigerians spend almost all their entire income trying to survive.
“The majority of our population, over 130 million, spend almost their entire income just trying to survive.
“Therefore, it doesn’t make sense to try to extract taxes from them. They have no ability to pay.
“We have designed a new national fiscal policy for Nigeria that addresses how our taxes should be structured, protecting the poor and ensuring that wealthier individuals contribute more while leveraging technology for tax collection,” he added.
He said the new tax policy would address consumption tax charged by states.
Describing it as VAT duplication, Oyedele said the new tax policy has made provision for states’ share in the VAT.
“We asked the states to discontinue consumption taxes as they are duplicating VAT.
“In compensation for that, their share of VAT revenue will go up to 90 percent.
“The five percent added is more than double what they collect as consumption taxes, so it is a win-win for them,” The Nation quoted him.
On Monday, June 24, the Chairman Presidential Committee on Fiscal Policy and Tax Reforms, on his X (formerly Twitter) handle, said businesses are not fruits that should be harvested in the immediate term.
He said taxing informal sectors affect growth of Small and Medium Enterprises.
“Africa’s large informal sector shouldn’t be targeted for tax extraction. Instead, it should be seen as a massive opportunity to drive growth and create wealth.
“Think of these businesses not as fruits to be harvested in the immediate term, but as seeds to be nurtured for inclusive development in the medium to long term,” he wrote.
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