₦airaland Forum

Good Morning, Nairalanders. Trust you woke up feeling pumped for the day 😁. In the midst of all these taxation conversation, I want to share my opinion on how I perceived the current benchmark of ₦800,000 per annum.

The World Bank poverty line is $3 per day per person, which roughly translates to ₦4,500 per person per day and about ₦1,600,000 per person per year. In comparison, the proposed Nigerian tax law begins at ₦800,000, which is less than half the global poverty line. This immediately raises a critical question: how does this favour a single, hustling individual trying to make ends meet?

When it comes to a family, it’s a different ball game because there are more individuals to cater for. The poverty line for a family should realistically rise to about five times this amount for a family of four, which is around ₦4,000,000. Yet, there is no such consideration, as everyone is pegged at a flat starting tax rate of ₦800,000. This doesn’t make sense, and I suggest that this framework be revised or replaced with an income-based exemption model that reflects real living conditions.

Beyond the numbers, the issue lies in fairness. What is not fair is everyone being benchmarked at the same rate that doesn’t exempt the poor. There are no tax exemptions for the education of children, healthcare for your family, personal use, some other premiums, dependents, or spouse benefits; nothing! Yet this is a global practice, widely recognized and implemented in both developed and developing countries to protect low-income earners.

I am very much in favour of taxation; it should make people expect more accountability from government. However, what I am not in favour of is something that is very legal, with strict evasion implications, being done shabbily. There is already a global standard for this, and there are Nigerian masses already bleeding from the many reforms being implemented. A poorly structured tax policy only adds salt to injury.

Therefore, the new tax laws should be implemented in line with the poverty line. People earning below ₦2 million have no business paying taxes. Better still, rather than fixing a static entry band, the government should implement the tax exemptions that must first be subtracted before an income qualifies for taxation. That is the proper and globally accepted approach. If the economy is stimulated and disposable income improves, more people will naturally move into the taxable income region. Don’t force it; grow it!

To illustrate this, the following can be removed before the remainder of income can be taxed: ₦500,000 for premiums on pension, housing, and insurance (or as already captured in the PITA); a personal allowance of ₦1.5 million; ₦800,000 for a spouse; ₦600,000 each for up to two children; and ₦400,000 each for up to two dependents. This amounts to about ₦2.4 million for a single person and ₦4.8 million for a family of four.

In many countries, including Kenya and South Africa, similar exemption structures are already in place, ensuring that only those earning above the realistic cost of living contribute to taxation. Nigeria should not be an exception. Taxation should reflect the realities of our lives. It should build us, not break us.

Have a jolly good day, fellows!

If the time reaches,don’t pay…

DesChyko:
Good Morning, Nairalanders. Trust you woke up feeling pumped for the day 😁. In the midst of all these taxation conversation, I want to share my opinion on how I perceived the current benchmark of ₦800,000 per annum.



Have a jolly good day, fellows!

The question I have not see people ask is: how is the tax going to be deducted? how would the government know and separate which money is income and which is financial inflow?

Because the way they are sounding and saying that everybody including kidnappers and Oloshos will pay tax, it means that they are planning to deduct from financial flows of every account once it hits 800k and above within a year.

I'm still wondering why no one is talking about this even media houses when granting interviews to these guys putting up this thing..

Ask yourself: is it that they are planning for kidnappers to walk into the bank to file their taxes or even online to say yes o, we just received 100 million from our recent kidnap operation and we are paying so and so amount for our tax?

I don't think so, from what I feel these guys are planning to is to start deducting from people's account once the account hits a threshold of 800k money flow into it, whether the money is income or not, that's why they have been bragging that everybody will pay tax..


If it is so, just imagine the chaos Tinubu and his patch patch economic team are about to cause in Nigeria, that;s why I laugh when I see people supporting this tax reform, you guys don't know whats up...

These might completely crumble all the gains made with cashless policy and also punish people who do heavy transactions for businesses or other related matters like even Esusu.


Then we have not talked about students and people who are sent money for a particular thing or the other which is not supposed to be counted as income, but I'm surprised people are not asking questions how the taxation will be done even media houses...

Brendaniel:
...from what I feel these guys are planning to is to start deducting from people's account once the account hits a threshold of 800k money flow into it, whether the money is income or not, that's why they have been bragging that everybody will pay tax..

As crazy as this sounds, I won't put it beyond this lazy government to do that. However, what normal governments do is to give us a tax calculator where we will input our earnings and exemptions, then obtain the amount we should file as our tax. We will compare this with their expectations, then defend any deficits on our part with proof. They have the resources to go after tax evaders if they so will.

Making automatic withdrawals from people's accounts is outrightly fraudulent.

DesChyko:
As crazy as this sounds, I won't put it beyond this lazy government to do that. However, what normal governments do is to give us a tax calculator where we will input our earnings and exemptions, then obtain the amount we should file as our tax. We will compare this with their expectations, then defend any deficits on our part with proof. They have the resources to go after tax evaders if they so will.

Making automatic withdrawals from people's accounts is outrightly fraudulent.

Well, i feel that's what they are about to do, for them to say that even bandits and terrorists will pay rax for ransoms received, which bandit and terrorist will go and file his ransom profit to pay his tax?

They already plan taking it forcefully from the bandits account once the money hits his accounts like account bandits...

That's what it looks like to me...

Or ask yourself how they plan to prosecute a bandit who doesn't pay his tax when they haven't prosecuted him for banditry but they are bragging already that they will collect tax from bandits?