*Superrich to pay up to 25% tax
By Douglas Maha, Abuja
The Federal Government has projected that Personal Income Tax (PIT) payments for wealthy Nigerians will rise from 18.6 per cent to 25 per cent once the Tax Reform Bills become law.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, stated that this increase would build on the 20 per cent revenue growth recorded last year.
Speaking during a Zoom dialogue meeting in Abuja, as reported by the News Agency of Nigeria (NAN), he noted that Nigeria’s economy has maintained relative stability over the past 18 to 20 months.
The tax reforms aim to enhance government revenue while also tightening expenditure controls. Edun highlighted key sectors expected to drive economic growth this year, including agriculture, housing, and infrastructure.
He said the government is committed to high yields through improved dry and wet season farming techniques, while also announcing the introduction of a 25-year low-interest mortgage scheme featuring single or low double-digit interest rates, to address the housing deficit.
He said infrastructure development will be boosted through the Highways Management and Development Initiative (HMDI), which seeks to concession major highways for better road infrastructure. A notable example is the 125-kilometre Benin-Asaba Highway, currently funded entirely by a private organization, he said.
Edun revealed that the government is shifting from concessional and bilateral financing to more affordable funding sources, including domestic bond issues, while reaffirming a commitment to resolving pension liabilities, revealing that over N700 billion in bonds had been issued for pension payments.
To move away from dependence on oil revenue, Edun said the government is creating a secure and investor-friendly environment for oil operations while aiming to maximize revenue from fossil fuels and encouraging public-private partnerships, joint ventures, and privatization to attract investment.
Edun noted that the economy nearly collapsed before the new administration, revealing that it had relied heavily on central bank funds borrowed beyond regulatory limits, but said recent developments indicate a turnaround.
In the last quarter of 2024, the economy grew by approximately 3.84 per cent, close to the annual target of 3.4 per cent, and Inflation has begun to decline, dropping by 1.3 percentage points between January and February, with food inflation also on the downturn.
Also, the cost of petroleum and energy has decreased due to sectoral adjustments.
The stabilization of the exchange rate has positively impacted the affordability of imported goods and services, including healthcare and education. Government revenues saw a 20 per cent increase in 2024, contributing to a positive balance of trade.
Nigeria’s tax revenue has experienced notable fluctuations over recent years. In 2019, the Federal Inland Revenue Service (FIRS) reported a total tax revenue of approximately ₦11.56 trillion, with quarterly collections ranging from ₦2.52 trillion to ₦3.64 trillion. By 2021.
Internally Generated Revenue (IGR) at the state level reached ₦1.90 trillion, a 21.54% increase over the ₦1.56 trillion collected in 2020. That same year, general government revenue stood at 7.3% of GDP, significantly below the ECOWAS and Sub-Saharan Africa averages. VAT collections for the first three quarters of 2021 totaled ₦496.39 billion in Q1, ₦512.25 billion in Q2, and ₦500.49 billion in Q3, reflecting steady improvement.
Edun pointed out that the budget deficit is shrinking, debt servicing as a percentage of revenue has declined, and overall economic indicators are trending in the right direction. He assured that the government remains focused on sustaining economic stability and fostering an environment conducive to private sector investment.
“We are leveraging technology to enhance revenue generation from government-owned enterprises,” he concluded, emphasizing the administration’s commitment to long-term economic resilience.
