Naija247news understands that the Nigerian National Assembly is deliberating on a new bill aimed at introducing a 50% tax relief for companies that increase wages or provide transportation allowances to low-income workers. The proposal, presented in the “Nigeria Tax Bill 2024,” dated October 4, seeks to ease the financial burden on companies willing to uplift their low-wage employees.
According to Naija247news, the bill specifies that companies would be eligible for an additional 50% deduction in their annual assessments for expenses incurred in the 2023 and 2024 calendar years. These eligible expenses include salary raises and transportation subsidies, specifically for employees earning gross monthly incomes of up to N100,000.
However, Naija247news gathered that any additional salary increment provided to employees whose earnings exceed N100,000 per month would not qualify for this tax deduction. The document clarifies, “A company shall be entitled to an additional deduction of 50 percent in the relevant years of assessment…for wage awards, salary increases, transportation allowance or subsidy…for workers whose gross monthly remuneration does not exceed N100,000.”
The bill also outlines incentives for hiring new employees. Naija247news understands that companies will qualify for the tax relief if they increase their average workforce during the 2023 and 2024 calendar years compared to the prior three years, as long as the new employees are not involuntarily terminated within three years of employment.
Additionally, on October 14, Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, announced that under a separate economic stabilization bill, the personal income tax (PIT) for Nigerians earning over N1.5 million annually would be increased. Naija247news gathered that individuals earning below this threshold would be exempt from the PIT adjustment.
The Federal Executive Council (FEC) had earlier approved the economic stabilization bills on September 23, introducing amendments to existing tax policies. Among these, one bill seeks to incentivize companies that generate incremental employment, while another offers personal income relief ranging from N200,000 to N400,000 for individuals in both private and public sectors.
Naija247news understands that this proposed tax policy is part of the government’s broader economic stabilization efforts, aimed at bolstering job creation, supporting low-income workers, and addressing the economic challenges faced by businesses and individuals in Nigeria.
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Reporting by Agnes Ekebuike Editor, Naija247news in Lagos, Nigeria.
