N’assembly proposes 50% tax relief to help companies increase salaries
The national assembly is considering a bill that will introduce a 50 percent tax relief for companies that increase salaries or offer transportation allowances to low-income workers.
The proposal is contained in an executive bill, titled ‘Nigeria Tax Bill 2024,’ dated October 4.
According to the bill, companies will be allowed an additional 50 percent deduction in their relevant years of assessment for costs incurred during the 2023 and 2024 calendar years.
The bill added that the qualifying expenses range from wage increases, transportation subsidies, or transport allowances granted to workers, whose gross monthly earnings are brought up to N100,000 or less.
However, the provision stipulates that any additional salary increase granted to employees earning above N100,000 monthly will not be eligible for the tax deduction.
“A company shall be entitled to an additional deduction of 50 per cent in the relevant years of assessment in respect of costs incurred in 2023 and 2024 calendar years on the following,” the document reads.
“(a) wage awards, salary increases, transportation allowance or transport subsidy granted to a low-income worker, which bring the gross monthly remuneration of the worker up to an amount not exceeding N100,000.00; provided that any additional award or salary increase to an employee earning above N100,000.00 as monthly salary shall not qualify for the additional deduction under this subsection;
“(b) salaries of any new employee constituting a net increase in the average number of new employees hired in 2023 and 2024 calendar years over and above the average net employment in the 3 preceding years, provided that such new employees are not involuntarily disengaged within a period of 3 years post-employment.”
On October 14, Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, said the personal income tax of Nigerians earning above N1.5 million will be increased under the new economic stabilisation bill.
Oyedele said people earning less than N1.5 million below would be exempted from the personal income tax (PIT).
On September 23, the federal executive council (FEC) approved the economic stabilisation bills seeking amendment of tax policies.
One of the bills offers tax relief to companies that generate incremental employment while another offers personal income relief to “people in private and public employment from N200,000 to N400,000”.
