FG Tasked on Fair Deal with Labour amid Tax Bill Concern

 Omolabake Fasogbon

A professor of Accounting and Financial Development, Godwin Oyedokun has suggested a roundtable discussion between the federal government and the Nigeria Labour Congress (NLC) on the new tax reform bills presently before the National Assembly. 

Oyedokun said the discussion was necessary to address the implication of tax reforms on Nigerian workers, which included higher taxes for high-income earners and corporations. 

The don during his presentation at the NLC National Dialogue on the new Tax Bill in Ibadan, recently, asserted that the motive of the bill was well-meaning, with the aim to broaden the tax base, boost government revenue, and modernise tax administration.

Speaking on “Proposed Tax Bills: Understanding it’s Dynamics and Several Implications to Nigerian Workers and Organiations,” he remarked that the bills would foster key changes like progressive income tax rates, new levies on luxury goods and digital services, and simplified regimes for informal businesses. 

He, however, noted that the reforms are accompanied by some downside risks, with glaring consequences on Nigerian workers, necessitating a review to mitigate the fall out. 

“Although, low-income earners are shielded from taxation and may benefit from enhanced social security, middle-class Nigerians may face reduced take-home pay due to higher tax rates and VAT, which will consequently squeeze their purchasing power. 

“The bills also taxes non-cash benefits like housing and transport allowances, raising fears of eroding take-home pay for salaried workers. For the informal sector, there are concerns about the readiness of small-scale entrepreneurs to adapt to formal tax obligations.”

Overall, Oyedokun was upbeat on the bills’ dividends to generate substantial revenue, reduce Nigeria’s dependence on oil, and foster economic diversification.