@ efisher the tax allows those who earn N30,000 and below to be assessed to the minimum tax which is 1% of income.
@ Gbawe there is definitely a lot of tax savings in d ammended personal income tax law.Previously all income above 160,000 is subjected to a tax of 25% but with the new table d various levels are taxed @ rates lower than 25% and even income above 3,000,000 are taxed at 24%

@ omo tier
stop distracting me with your messages, the flight you mentioned is a cargo flight, re u a cargo?
who dash you executive in uk oh!! I see, you are an executive in a waste recycling company lol
uk area champion

area!!!

jp philips:

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, there are no cabals, in 2009 the scarcity of petroleum products became intense and the Govt admitted that Nnpc through its subsidiary PPMC has failed Nigerians by their inability to meet up with the supply of pet. Products and that phenomenon gave rise to licensing of some people to 'assist' the Nnpc in doing their job for which they are paid for.

Please don't forget that hitherto, Nnpc has been doing the importation and refining themselves before corruption eroded their common sense.These importers went abroad and came back with a price Nnpc is already aware of comprising of logistics, storage and administrative costs, these were quantified before they arrived at a price.
The FG now fixed a price tag of 65naira on Pms and agreed to be reimbursing the importers the balance not oblivious of the fact that the landing cost is higher than the stipulated price

To my greatest chagrin, the Jonathan’s administration woke up and termed them 'cabals' who are fleecing the nation.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this docile? If Nnpc lived up to their responsibility, we won’t have need for the importers in the first place.

There is no doubt that the subsidy regime is met with corrupt practices, is it not the responsibility of the govt to clamp down on those malfeasance?

The only solution that came to the minds of this disgruntled PDP administration is to remove subsidy into-to not minding its inflationary consequences.

This is the si1liest approach any human being with brain if they have one can summon.

Thirdly,

Jonathan insulted the intelligence of Nigerians telling us  that we don't benefit from this subsidy except for the importers and he had the unbridled temerity to be advertising it on NTA saying the rich are getting richer.
This people are demons.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

I feel sorry for people that think that competition will crash the deregulated price erroneously juxtaposing it with GSM.
Do you know that the price of crude being the raw material for refined pet. Products are sold at the same price in the whole world?

If you agree to this, then, even if you deregulate and license 5million importers the product will still be expensive because crude itself is expensive. You will still need to subsidize it to 65naira. Exactly why deregulation of diesel in part did not work.
The only reason you have not bought diesel @ 200naira is because there are so many illegal refineries who bunker crude, settle JTF and refine diesel at a lower price.

This people still pose a great threat to the importers who buy at a higher price that is why you get diesel @ 140naira elsewhere but in the delta i buy as low as 70naira.At this verge you will not over rule the fact that these unscrupulous elements contribute to the availability of diesel, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have diesel.

I still feel sorry for those who think the Govt should build more refineries, that will not solve the problem either because there is no cheap crude to supply these refineries.

The oil production of Nigeria stands at 2.37 million barrels of crude daily. Nigeria get this crude in a JV (joint venture) with IOC's (international oil companies) and the Nigeria's cut stand btw 55% to 60% of the lot, if we go by 60% thenThat gives a total of 1.4m barrels daily.If we average the crude price from 2009 till date, the price falls close to 100usd/bbl.
In that case, Nigeria makes 140,000,000usd daily from this JV.
Nigeria has a policy called DSO (domestic supply obligation) which mandates 250,000bbl/d of this crude to be refined and consumed locally,In monetary terms, the Nigerian govt is giving us 25,000,000usd worth of crude to refine.Our three refineries at optimum capacity utilizes 450,000bbl/d which gives 45,000,000usd in monetary terms in other words, the price of raw material in this case, crude, accrued to our refineries comes at 45m usd per day, if you add refining cost and profit of 6usd per bbl,
The total cost becomes 270,000,000usd per day.There is no way you can refine that crude at that price and sell it 65naira/l and make profit.

Meanwhile, once we mark out that 45m usd worth of crude for our refineries (assuming they are working at optimum capacity), the govt has already lost 45m usd from their 140m usd daily earnings (which will affect budget implementation) and after refining will still spend more money to subsidize it to 65naira/l

With this analogy, you will agree with me that if all our refineries are working optimally, the govt will spend 3times our present day subsidy to bring the pump price down to 65naira/l.

So, for those of you clamoring for refineries should be careful what you wish for because there is no cheap crude for you to refine.I have argued abinitio that the sales of other derivatives of crude will bring down the cost of most sort PMS,DPK etc but after doing some feasibility studies, i realized i was dead wrong.

I further argued that to make cheaper crude available for our refineries, the Govt should reduce the price at which it is supplied unfortunately, the senate mandated the then GMD of Nnpc that the DSO must be sold at international crude price.

This i believe was proposed for the following reasons:

1 the refineries are working below capacity so what the heck does Nnpc use the crude for?

2, there is a benchmark on crude price for budget implementation.With these reasons, any existing or yet to exist refinery in Nigeria will get crude at a high price and must need subsidy to sell at 65naira/l, at this cross road, the then GMD of Nnpc decided that all crude should be exported and subsidy be paid on imported products.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the profit margin but not cost price.

Even if every Nigerian becomes an importer of pet. Prods, we can never change the fact that crude in the int l market is already expensive before thinking of refined prod.

So we must need subsidy to make profit.Before this issue of subsidizing petroleum products can be addressed,You must have the following at the back of your minds:

1, Nigeria pegs a benchmark on crude prices to enable it implement budget. This stands at 75usd/bbl. And this crude is sort from the JV.

2, if crude price exceed the benchmark above, Nigeria makes excess crude revenue (ECR)

3, conversely, if we make excess crude revenue, the price of subsidy on refined products shoot up.With the above analogy,
One can argue that the ECR be used to subsidize imported petroleum products since both are a function of each other unfortunately in Nigeria, it comes with its own challenges.By law, the constitution clearly states that

"all revenue accrued to the FG be shared amongst the three tiers of Govt".

This alone makes it illegal for the FG to keep the ECR to itself for whatever reason.This is where the wahala started, during GEJ's campaign, he astronomically increased workers salary without consulting the state Governors,most Governors have refused to pay on the grounds that they cannot afford it.
On that grounds Taraba, jigawa and some other states have a genuine case.

With the above development, the states started scrambling for funds and remembered the ECR and insisted it must be shared to enable them pay the new wage and develop infrastructures.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. That will push down the cost of the subsidy in the first place.Like i said in April, no matter how sincere GEJ think his administration is, he cannot make any reasonable progress in the face of corruption,

2, the power projects must come upstream before removing subsidy, this will reduce the demand on pet. Products to a very great extent.

3, Nigeria must accommodate Gas export, port duties and other forms of revenue in their budget implementation policies

.4,  Govt must never invest an extra kobo in our moribund refineries, by doing otherwise, the cost price of the refineries will rise to an extent that it will no longer be attractive to investors or will prolong their repayment plan.Thereby making it very capital intensive.

5, Instead of deceiving Nigerians with their cabal bullshit and deluding them that they don't benefit from this subsidy, the FG should channel that propaganda with intense lobbying to the senate,NLC and civil society organizations to stop the state governors from demanding for the ECR, this can be achieved by the FG asking the state to pay whatever increment they can afford for the workers that way the ECR will be used for subsidizing pet. Products.

In the long run:

1 Nigeria must seek local production capacity.It is no longer news that Nnpc and its subsidiaries have failed woefully in meeting the needs of the Nigerian people.Nnpc through its subsidiary Npdc and Ngc are saddled with the responsibility of the above for oil and gas production respectively,

but as i write, the current production of NPDC stands at a paltry 90,000bbl/day which is a huge failure for an agency set up 23yrs ago,The IOC's has made us believe that it will cost less than 12usd to extract 1bbl of our oil.

The Management of NPDC must be reshuffled and if possible experts brought in on contract basis to improve NPDC's productionThese experts must be placed on targets appraised by milestones. in ogoni land for instance, Anglo dutch has a lot of abandoned production facilities and marginal wells and others scattered all over the country,

these can be bought by NPDC with the money FG want to waste on refineries to improve production,If NPDC can extract oil at 12usd/bbl and make a little profit, with this cheap oil available,

Nigeria will have no reason going to the JV. This cheap crude will attract investors to build refineries and create jobs,A 250,000bbl/d refinery will cost a little above 5b usd, dangote alone can afford two of those only if NPDC can guarantee cheap oil. This is why no investor is coming to build refineries.

A crude price of 18usd/bbl from NPDC will guarantee pump price of less than 22naira per litre of pms from these refineries.With this plan,

By the end of this Administration, NPDC will have robust production capacity and the refineries will guarantee steady refined products.

These refineries shouldn't be operated by the Govt for any reason.The FG will generate revenue from both ends, export of crude and export refined products and the production of NPDC must be increasing periodically.Once the above takes effect, there won’t be any need to be paying subsidy because pump price will be around 23naira/l and inflation will reduce by 40‰.

Now, how competent is Allison Madueke and iweala if they can’t figure this out?

To think of removing subsidy at this stage where there is no electricity and high corruption rate will be tantamount to economic suicide.

Please if the both of you want a trial and error approach to economic solutions please try the next country or preferably Haiti.

What iweala forgot is that in the face of inflation the cost of running Govt projects will be high, All Govt contractors will definitely come back for contract variations or Abandon those projects.

As a sound economist, she should tell Nigerians the value of 1.3 trillion naira ( she intends to save on subsidy removal) in the face of 60% inflation and how many projects Nigerians will benefit from the subsidy removal.

If you remove subsidy and the money disappears, then it is a NO NO for Nigerians

Permit me to copy your write up, as i really need carefully read this and take notes, i await your permission, thanks

permission granted

ijigbamigb:

Permit me to copy your write up, as i really need carefully read this and take notes, i await your permission, thanks

Ode, does Arik Air fly cargo to UK?, see what your GEJ led FG has turned you into!, I bet the 'indians' and 'Lebanonese' He brough to 'Industrailized' your economy is giving you some 'moden' day slavery

@Omo_Tier1,
I now see the reason why about 2.5 million Lagos residents have been found to be suffering from one form of mental illness or the other as espoused by Lagos state Commissioner for Health-Dr Jide Idris, has said. At least some points are really worthy of note from that article.

probably u have succeeded in escaping from yaba left, to the streetz of London, shaaa join the protest,

@ omo tier
I chose to promote you to cargo because that is the much a mortuary attendant can afford
lol

ijigbamigb:

@Omo_Tier1,
I now see the reason why about 2.5 million Lagos residents have been found to be suffering from one form of mental illness or the other as espoused by Lagos state Commissioner for Health-Dr Jide Idris, has said. At least some points are really worthy of note from that article.

When FACTS are misleading, numbers misplaced, only dullards will see such an article as worthy of note!

jp philips:

@ omo tier
I chose to promote you to cargo because that is the much a mortuary attendant can afford
lol

I blame the hospital guard that let you out, COWARD!

This aint fair.

omo Tier!

Given the foregoing exposition, can we infer/deduce from wot you guys are saying that it all translate to more money for us as pay-check?just asking.

conquerorb:

Given the foregoing exposition, can we infer/deduce from wot you guys are saying that it all translate to more money for us as pay-check?just asking.

Yes. I have done a comparison between the PITA 2004 and PIT (Amendment) Act 2011 just signed into law and the current one is better. The reason being the adjustments in the bands and the consolidation relief allowance of N200,000 subject to a minimum of 1% whichever is higher plus 20% of the gross income.

Can some one please break down this tax thing in simple English with exact example of what an Individual collecting X amount would pay as Tax between the Last Tax computation and the new one and lets compare the savings.

Omo_Tier1 and jp philips please let it go

Thanks

Gymer, thanks for the explanation and examples. Quick question, I'm a bit confused, please :

The "plus 20% of gross income", is that added onto/with the N200,000 / 1% minimum (the higher of the two) as additional relief?

Also how does this differ from the example, you gave? Would it mean the above "consolidated relief" (including the additional 20%) will FIRST be deducted from the yearly income, before proceeding to calculate the tax amount from the balance after having taken the "reliefs" (and 20%) out? Thanks.

Thank God for this palliative or whatever. it was implemented in my office this month, and my tax reduced by N18,000. This is great!!!

@All
l heard this will be backdated to 6months? how will one get the over payment for the past 6months?

This Ms. Oteh Woman should watch her back very well oh! May God help her when d scavengers come calling!

Gbawe:

We should examine the "new" regime in perspective of per capita income.   Nigeria's Per capita income for 2010 , according to the link below, is $2,500.00 approximately N400, 000.

http://www.indexmundi.com/nigeria/gdp_per_capita_%28ppp%29.html


Well, under the new regime, a Nigerian earning per capita income (the best figure for comparison) will pay N32,000 (N21,000 for the first 300,000 at 7% and N11,000 on 100,000 pegged at 11% for the next 300, 000).

Under the old regime, a Nigerian earning circa per capita income will pay :

First N30,000 taxed at 5% =          N1,500.00
Next N30,000 taxed at 10% =        N3,000.00 covers band N30,000 up to the N60,000 salary threshold.
Next N50,000 taxed at 15% =        N7,500.00 covers band N60,000 up to the N110,000 salary threshold
Next N50 000 taxed at 20% =        N10,000.00 covers band N110, 000 up up to the N160,000 salary threshold
Above N160 000 taxed at 25%=     N60, 000. 00 covers band N160,000 to N400,000. 000 (being per capita income)

Total =  N82, 000.00 . The difference between old and new is then N50,000 for those earning circa N400,000.00. The difference is much less for those earning less than N160,000. 00 (around N10,800. 00) . That does not seem like much of "palliative" to me when hyper inflation is factored in that doubles or treble the cost of everything from food through to rent and even a haircut. 

I am no tax expert or accountant , and I certainly welcome correction, but I do my own UK tax return similar to what is laid out below that I picked out randomly and will assume the above calculation is correct.



http://www.ato.gov.au/youth/content.aspx?doc=/content/40811.htm

Taxable income


Tax on this income

$1 - $6,000                   Nil

$6,001 - $34,000          15% for each dollar over $6,000 (maximum tax in this bracket is 15% of $28,000= $4,200)

$34,001- $80,000          $4,200 + 30% for each dollar over $34,000 (maximum tax in this bracket is $4,200+ $13,800= $18,000

$80,001 - $180,000        $18,000 + 40% for each dollar over $80,000 (maximum tax in this bracket is $18,000, + $40,000 = $58,000)

$180,000+                      $58,000 + 45% for each dollar over $180,000

The first $6,000 you earn in an income year is tax-free. This is called the tax-free threshold.

I am totally agree with your answer .
Regards,

KBKG -Cost segregationFirm

Does anyone know how contributing to a life Insurance scheme(i.e Mutual Benefits Life Assurance) on a monthly basis can be used to reduce the contributors PAYE.
If you do, please I will like to be educated concerning the dynamics of the tax policy.