THE Federal Executive Council (FEC) has approved the Economic Stabilisation Bills, embodying the recommendations of the Presidential Committee on Tax and Fiscal Policy Reforms.
The FEC okays the recommendations at its meeting held on Monday, September 23, according to a statement by the special adviser to the President on Information and Strategy, Bayo Onanuga.
Stating that the FEC took various decisions at the meeting, he said, “The Council also approved the Economic Stabilisation Bills, which embody the recommendations of the Presidential Committee on Tax and Fiscal Policy Reforms set up last year by President Tinubu.”
The presidential tax committee’s bills seek to amend the income tax laws, promote the export of goods and services, reform the exchange rate regime and unlock foreign exchange liquidity.
According to Onanuga, one of the bills offers tax relief to companies that generate incremental employment, and another offers personal income relief to people in private and public employment, from N200,000 to N400,000.
The FEC also approved the suspension of certain taxes bill seeking federal and state collaboration to suspend certain taxes on small businesses and vulnerable populations.
“Among the taxes to be axed are road haulage levies, business premise registration levies, livestock levies, and market taxes and levies.
“The Economic Stabilisation Bills, with the Council’s approval, will now be transmitted to the National Assembly for passage,” Onanuga hinted.
Last year, precisely on July 6, President Bola Tinubu set up the tax committee and appointed Taiwo Oyedele as chairman.
The committee was inaugurated in the following month, August 8, with the mandate to reform and harmonise Nigeria’s fiscal policy and tax system.
Currently, the federal government has about 17 approved taxes and levies, states about 21, and local government about 17, but the committee had proposed a reduction of the multiple taxes paid to various levels of government to a single digit of eight taxes.
The proposed tax items are income tax, value-added tax, property tax, customs duties, excise tax, stamp duties, special levy, and harmonised levy.
It also proposed the addition of social security contribution, which it said should not be regarded as a tax.
Its key objective is to do away with nuisance taxes with very low revenue yield, high cost of collection, and ultimate burden on the poor and small businesses and focuses on high revenue-yielding taxes, that are broad-based and relatively easy to collect.
The ICIR reports that the tax reduction is part of the committee’s reform proposal to help lower the tax burdens placed on individuals, households, and businesses.