Federal government is considering implementing a 25% tax rate on individuals earning N100 million and above monthly in the country.
Gatekeepers News reports that the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele stated this at a breakout session during the Nigeria Economic Summit organised by the NESG.
Oyedele explained that the 25% tax on the rich was needed to balance the tax burden on low-income earners while ensuring that higher-income individuals contribute more to government revenue.
He also stated the federal government plans paying back to businesses 100% of the Value Added Tax (VAT) paid by them on asset and services.
According to him, businesses paying VAT on assets such as cars, laptops etc increases their overall cost which contributes to inflation.
He said, “If you earn N100 million a month, we’re taking up to 25 percent from the rich people. That’s because we need to balance the books.”
“Today, whatever VAT you (businesses) pay on assets—whether you’re building a factory, buying a laptop, or vehicles—you bear it. This increases your cost, and therefore, your pricing will go up. Once our reforms are implemented, you get the credit back 100 percent on services and assets.”
It is expected that this proposal would enable companies to deduct the VAT paid on goods and services used in production from their tax liabilities, potentially alleviating cash flow challenges and boosting economic activity.
