The federal government said it is working on a system that will provide new fiscal and tax relief policy for 95 per cent of businesses in the informal sector adding that, a committee had looked into some of the taxes in the constitution and called for their review.
The new tax reform ecosystem is expected to drive growth in the informal sector and exempt small businesses whose yearly turnover are less than 25 million.
The chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, said this would be achieved with businesses earning N25 million a year or less from the various taxes hindering their progress over time.
He said 95 per cent of businesses of the informal sector should be exempted from all taxes, withholding tax, company income tax, and even payee on their staff.
“We are using data to inform our decision currently, if you earn 25 million or less in a year, you don’t have to pay company income tax, you don’t have to worry about tax;”he said.
He noted that the informal sector operators are people who are trying to earn legitimately, noting that, ‘we should allow them grow to the point where they can then have the ability to pay taxes.’
He said the committee was drafting the law to effect the necessary changes in the fiscal policy and tax reform ecosystem.
Oyedele said the new reforms being proposed would focus on the top five per cent of that sector, adding that the new laws will ensure that reviews become sustained by all governments coming in.
On compliance, he urged all stakeholders to fully cooperate with the government in implementing a new fiscal and tax policy that would be used for the general good of the citizens.
Oyedele explained that some of the taxes being complained about by Nigerians were some of the taxes already in the constitution which the committee had looked at and called for their review.
Oyedele said the committee report would be made to pass through the normal process of legislation in order to give it the full legal backing.
“In terms of priority spending, in terms of efficiency of spending and in terms of focusing on what impact the lives of majority of our population that live in multidimensional poverty. He added that the committee had been working with the sub nationals and the local government council, in its efforts to harmonize the tax into a single digit in the country,” he said.
