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President Buhari

Nigeria to exempt minimum wage earners from personal income tax

By on November 23, 2020 0 163 Views

By Samue Bankole

Nigeria plans to exempt those who earn minimum wage from Personal Income Tax (PIT) under its proposed 2020 Finance Bill, President Mohammadu Buhari said on Monday.

President Buhari who spoke through his Vice President Yemi Osinbajo at the ongoing Economic Summit said the move will reduce the impact on inflation and other economic hardship of the set of Nigerians.

“We are proposing in the new Finance Act that those who earn minimum wage should be exempted from paying income tax.

“These provisions which complement the tax breaks given to small businesses last year will not only further stimulate the economy but are also a fulfillment of promises made to take steps to help reduce the cost of transportation and the impact of inflation on ordinary Nigerians,” the Vice President said via a virtual link to economists and top policymakers and private sector players on Monday.

He said the exemption from tax payment coupled with other items in the proposed Bill, and various economic policies of the Federal Government, these incentives would ensure the resilience of the Nigerian economy to exogenous shocks.

Nigeria last year adopted N30,000 as minimum wage for both public and private sector workers, but many states are yet to implement the national minimum wage policy due to paucity of funds.

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Explaining the role of the private sector in building a resilient economy, President Buhari said “this government has always emphasized that the private sector has a key role to play in our efforts to build a more resilient and competitive economy as expressed in the Economic Recovery and Growth Plan.

“Private companies in design, construction, logistics and finance are very much engaged in our infrastructural projects in power and rail as well as road and bridges and the installation of broadband infrastructure which is an essential requirement if Nigeria is to participate actively and benefit from the 4th Industrial Revolution.

“…it is clear that we must diversify the economy away from dependence on crude oil exports, speed up human capital development and improve on infrastructure. Above all, our economy must be made more resilient to exogenous shocks. It is important for the private sector to play a key role as we work together to identify national priorities and try to influence our future national trajectory.”

The President also gave insights to the collaboration between the Central Bank of Nigeria (CBN), the Nigerian Sovereign Wealth Investment Authority (NSIA) and other stakeholders in the creation of an Infrastructure Company (Infraco) Fund to address some of the nation’s critical infrastructure needs.

“It goes without saying that partnerships remain essential to attract the resources for building a solid national infrastructural base. I am pleased to inform you in this regard that we are working actively with the Central Bank, Nigerian Sovereign Investment Authority and State Governments under the auspices of the National Economic Council to design and put in place a N15 trillion Infraco Fund which will be independently managed.

“The Infraco Fund will help to close the national infrastructural gap and provide a firm basis for increasing national economic productivity and growth,” the President explained.

Restating the commitment of his administration to sustaining collaborations with the private sector in addressing challenges, President Buhari said “if there is one single lesson to be learnt from the COVID-19 pandemic, it is that partnerships are essential for credible responses with lasting effects.

“Our national journey to economic prosperity is a long one, so we must all certainly work together. As we saw, partnerships were essential when we were faced with the serious challenge of combatting COVID-19.

“We saw the key role that partnerships played in our national effort to combat the COVID-19 crisis. While Federal and State Governments worked together to manage the health response and ensure the establishment of isolation centres and availability of test kits, personal protective equipment, and medicines, the private sector also played an active role as individual entities, and also worked together in groups like the Coalition Against COVID-19.”

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