By Ibrahim Apekhade Yusuf
CONTRARY to assurances by the federal authorities, indications are that the Finance Act 2020 might have far reaching unfavourable results on workers as they’re anticipated to pay more taxes henceforth.
This is the submission of ‘Yomi Salawu, Stransact Partners Lagos, Nigeria, a monetary analyst cum tax expert.
In a launched issued by Salawu and made out there to our correspondent, he took the federal authorities to activity on the so-called tax reliefs granted by some part of workers, stressing that it leaves nothing to cheer about.
In the assertion tagged: ‘Finance Act 2020: Implication for Employees,’ Salawu famous that whereas it was gladdening to get up on 1 January 2021 realising that the President of the Federal Republic of Nigeria had signed the Finance Bill 2020 on 31 December 2020 however regretted that the pleasure quickly pales into insignificance if the import of what the invoice is supposed to obtain is critically analysed.
In the launch which reads partially, he stated, “One of the amendments introduced by the Finance Act 2020 has indirectly increased the Personal Income Tax payable by taxpayers, especially employees. The Act amended section 33 of the Personal Income Tax Act and this increased the tax payable under the Act by between 1% and 5%. This means, in addition to pension and national housing fund contributions, employees will see more deductions on their pay slip on the same income earned in 2021 when compared with 2020.”
While additionally noting that, the Act exempt individuals incomes nationwide minimal wage or much less from paying taxes altogether, that is argues is not sufficient.
“In our opinion, this is not enough. The threshold for minimum wage which has remained unchanged for several years ought to be adjusted upward for this new tax relief to be meaningful. It is even better if this tax exemption threshold is not pegged to the minimum wage but fixed at a figure reflective of the minimum cost of surviving in a month for most urban dwellers in Nigeria. A threshold of ¦ 50,000 for complete tax exemption would have been more impactful, especially considering the impact of COVID-19 on the average tax payer.”
Expatiating, he says, “The impact of the Act seems to be at variance with the utterances of the Honourable Minister of Finance, Budget and National Planning. The minister had stated that the federal government had no plans to increase income taxes. Therefore, Government may need to enact new legislation with far reaching impact than the Finance Act 2020 if it truly wants to alleviate the suffering of Nigerians in 2021.”
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