•Warns increase in income tax may erode gains of minimum wage for low-income earners
From Juliana Taiwo-Obalonye, Abuja
In a concerted effort to reshape Nigeria’s tax system, stakeholders at the just concluded 2024 National Tax Conference, in Abuja, put forth a series of recommendations aimed at fostering sustainable economic growth and promoting social equity.
The conference, themed “Economic stabilisation for equity: Ensuring fairness in fiscal reforms,” gathered 173 participants from various sectors, including government, civil society, labour unions, and the media, underscored the urgent need for reforms that ensure fair taxation across all income levels.
Key recommendations include making the tax system more progressive to ensure that high-net-worth individuals and large corporations contribute their fair share.
Participants warned that the proposed increase in Personal Income Tax (PIT) rates could undermine recent minimum wage gains for low-income earners. Instead, they recommended capping the second tax bracket at 10 percent and increasing the rate for those earning above N50 million to 26 percent to balance revenue needs with economic realities.
The conference also called for greater transparency regarding Value Added Tax (VAT) compliance rates, urging the Presidential Committee to publicly share data that highlights challenges and potential solutions. Stakeholders emphasised the importance of legislative support from the National Assembly to pass tax harmonization bills and digitize tax administration processes.
Public education campaigns were deemed essential to clarify the objectives of fiscal reforms, while platforms for citizen engagement were recommended to ensure broader participation in policy formulation. Additionally, a portion of any increased revenue should be redistributed to benefit lower tax brackets and vulnerable populations, including women, girls, and persons with disabilities.
Participants cautioned against raising VAT rates during periods of high inflation, advocating instead for an expansion of VAT exemptions on essential goods such as food and energy sources. The need for clear indicators to monitor gender inclusivity in fiscal policies was also highlighted.
The conference concluded with a unified call for reforms that align fiscal policies with equity and economic stabilization, emphasizing a collective commitment to building a fair and inclusive tax system that promotes sustainable development for all Nigerians.