Tax Reform Bills Will Enhance Welfare of Workers – Oyedele Replies Ajaero

By Chibuike Nwabuko

ABUJA (PRECISE POST) – The Chairman, Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele has reacted to the statement credited to the President of the Nigeria Labour Congress (NLC), Comrade Joe Ajaero, clarifying that the tax reform bills aimed at improving the welfare of workers.

Precise Post recalls that his reply is coming against the backdrop of the demand from NLC that the Federal Government withdraws the controversial tax bills from the National Assembly.

In his New Year message to Nigerian workers, Ajaero said the need to withdraw the bills was based on the welfare of the Nigerian workers.He also spoke on the need for government to reflect transparency, inclusivity and honesty in its dealings with the masses.

The message, titled “In 2025, hope is in our collective resolve,’’ read: “As we step into the year 2025, the Nigeria Labour Congress, (NLC), extends warm New Year greetings to every worker and citizen across our great nation.

‘’The challenges of survival we have faced as a people must not hold us down. Instead, let us find inner strength to build a collective resolve to drive Nigeria out of the morass of underdevelopment that has held it captive for far too long.

“No external power will deliver us from the scourge of economic hardship and stagnation. It is only through our collective effort and determination that we can propel our nation forward.

“We must build inner strength to find this collective resolve across the length and breadth of our great nation. This is our civic responsibility—one we must embrace with unwavering determination.
“We call on the government at all levels to ensure that governance translates into real benefits for the people. The welfare of the citizens remains the primary justification for the existence of any government.

“Access to food and nutrition, better healthcare, quality housing, education, transportation and greater security of lives and properties, including the right to participate in decisions on how they are ruled, are the key expectations of the people and workers.

“Policies must, therefore, reflect transparency, honesty, and inclusivity, devoid of chicanery, nepotism, and strong-arm tactics.

“To create a thriving, democratic nation, we need a system built on the tenets of social dialogue, allowing critical stakeholders to participate actively in nation-building. Such inclusiveness will foster deeper ownership of government policies, ensuring stability and sustainability.

“It is on this premise that we once again call on the federal government to withdraw its present tax bills before the National Assembly so that all key national stakeholders will be part of the process.

In his response, Ayodele said:

“We welcome the interest of the Nigeria Labour Congress (NLC) on the Tax Reform Bills. We note the concern expressed about the likely impact on the welfare of Nigerian workers.

However, for clarity, we outline below some of the key provisions of the tax bills aimed at improving the welfare of workers:

1. Lower taxes to enhance the disposable income of workers –

a) Full exemption of low-income earners up to N1m p.a. (about N83k per month) representing about one-third of all workers in the private and public sectors from PAYE tax

b) Reduced PAYE tax for workers earning up to N20m p.a. (about N1.7m per month) benefiting additional 60% of all workers

c) PAYE tax exemption for members of the armed forces fighting insecurity in addition to other ranks

2. Measures to reduce the cost of essential items –

a) Zero (0%) VAT on food, healthcare, and education representing about 60% of all consumptions

b) VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, and fuel products representing over 20% of all consumptions

These items constitute an average of 82% of household consumption and nearly 100% for low income earners to ameliorate the rising cost of living for workers.

3. Incentives to facilitate higher compensation for workers –

a) Tax break for wage awards and transport subsidy to low-income earners

b) Removal of restrictions and bureaucratic approvals for wage awards

c) Introduction of a cap on the taxable amount of benefit in kind granted to workers

4. Tax waivers to promote affordable housing –

a) VAT exemption on rent and acquisition of real property

b) Exemption of stamp duties on rent below N10m

5. Incentives to stimulate employment opportunities for workers –

a) Tax incentives for employers to hire more workers

b) Friendly tax rules to attract remote work opportunities for Nigerians

c) Tax exemption for 97% of SMEs, harmonisation and reduction of corporate tax rates for large businesses to stimulate growth and create more employment opportunities for workers.

While we recognise that the tax bills can be further improved through robust debates and engagements, which can take place as part of the ongoing legislative process, the bills in their current form are the most pro-workers tax reform in Nigerian history. We believe that the NLC will not intentionally work against the interest of its members. We therefore look forward to the opportunity to discuss specific areas for improvement in the bills to better serve the interest of all Nigerians including workers.