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President Bola Ahmed Tinubu’s economic reforms, which focus particularly on tax restructuring, are making waves across Nigeria.
His policies, aimed at revitalising the economy, ensuring fairness in taxation, and boosting investor confidence, are gaining recognition.
Despite criticism from some quarters, supporters argue that these reforms will pave the way for sustainable economic growth.
When President Tinubu took office in 2023, he inherited a struggling economy. However, instead of maintaining ineffective policies, he took bold steps to restructure Nigeria’s financial landscape.
One of his major achievements is the introduction of the Tax Reform Bills, which aim to simplify the tax system, reduce the burden on workers, and create a fairer economic structure.
Key tax reforms and their Impact
A significant aspect of Tinubu’s reforms is the exemption of workers earning minimum wage from personal income tax. This move is expected to provide much-needed relief to low-income earners.
In addition, the VAT rate, which was initially proposed to increase to 12.5%, remains at 7.5%, reducing inflationary pressure on Nigerians.
Small businesses are also set to benefit. The tax exemption threshold for small enterprises has been raised from ₦25 million to ₦50 million in annual turnover, allowing more businesses to grow without excessive taxation.
Additionally, corporate income tax for larger companies has been reduced from 30% to 25%, encouraging investment and job creation.
Arabinrin Aderonke, a tax analyst, highlights the significance of these measures: “These reforms show the Renewed Hope Agenda’s commitment to a tax system that is fair, simple, and good for business.”
Addressing labour concerns
Despite the benefits, the Nigeria Labour Congress (NLC) President, Joe Ajaero, has called for the withdrawal of the Tax Reform Bill. His opposition has sparked debates on whether his concerns are valid or based on misconceptions.
Analysts argue that the reforms prioritise workers’ welfare by lowering personal income tax burdens and making essential goods more affordable through VAT exemptions.
Aderonke questions Ajaero’s stance: “Has there been adequate consultation with unions, economic experts, and workers who stand to gain the most? The bill prioritises affordability and financial relief for low- and middle-income earners.”
Strengthening state economies and business growth
One of the reform's standout features is the revised VAT revenue-sharing formula, which allocates 60% of VAT proceeds to the states where goods and services are consumed.
This move is expected to empower state governments with more resources to invest in infrastructure, education, and healthcare.
Moreover, the introduction of the Office of Tax Ombud ensures that tax disputes are resolved efficiently, protecting businesses from arbitrary assessments.
A Renewed Hope for Economic Growth
Supporters argue that President Tinubu’s reforms lay the foundation for a more sustainable economy.
The policies aim to boost investor confidence, create jobs, and drive national development by making taxation fairer and business-friendly.
Aderonke concludes: “President Tinubu is building the foundation for a stronger and more prosperous Nigeria. His leadership is focused on economic stability, innovation, and fairness for all.”
Nigerians are watching closely as the Senate prepares to approve the Tax Reform Bills.
If implemented effectively, these reforms could mark the beginning of a new era of economic stability and prosperity for the country.