Nigeria relaxes tax policies to reduce burden on citizens

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June 7, 2018 4:36 PM

The new policies entail VAT exemption for life insurance, public transportation, residential buildings, etc; while taxes on SMEs will now be reduced from 20 to 15%.

The new policies entail VAT exemption for life insurance, public transportation, residential buildings, etc; while taxes on SMEs will also be reduced from 20 to 15%.

The Nigerian government has approved value-added tax (VAT) exemption on life insurance, public transportation, residential buildings among others.

The government also relaxed taxes burden on Micro, Small and Medium Enterprises (MSMEs) from 20 to 15%.

Kemi Adeosun, Nigeria's minister of finance stated this after the weekly executive council meeting on Tuesday, June 6, 2018.

According to her, the new policies will, among others, entail VAT exemption for life insurance, public transportation, residential buildings, etc; while taxes on SMEs will now be reduced from 20 to 15%.

What the new tax policy is all about:

The proposed tax laws reform by the National Tax Policy Implementation Committee (NTPIC) is expected to achieve the following specific fiscal objectives:

- Remove obsolete, ambiguous and contradictory provisions in the laws

- Increase government revenue

- Simplify the process of paying taxes

Also READ: In Nigeria, 19 million citizens are now paying taxes

- Promote Micro, Small and Medium Enterprises (MSMEs) and protect most vulnerable persons in the society.

- Reduce taxation burdens on Nigerians and also fast-track the ease of doing business.

According to Adeosun, these new initiatives fell under the two approved Executive Orders and five Amendment Bills to the country's tax policies.

She said the approval followed the presentation of a memorandum to seek the consideration and approval of the Executive Council for the report of the National Tax Policy Implementation Committee on Tax Laws Reform.

Last month, the minister said the country’s taxpayers’ base has risen from 14 million in 2016 to 19 million in 2018. She said 19 million citizens are now paying taxes from the 65 million economically active people who "are not tax compliant".

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