The federal government may soon remove taxes on essential goods and services, following a proposal by the Presidential Committee on Fiscal Policy.
Taiwo Oyedele, the committee’s chairman, announced the plan, which aims to alleviate the financial burden on citizens by making basic necessities more affordable.
The proposed tax exemption covers essential items such as food, public transportation, house rents, and other vital goods and services. Additionally, these items would be exempt from value-added tax (VAT).
Oyedele revealed the plan during a recent interview with Channels TV in Abuja, stating that it will be signed by President Bola Tinubu and then submitted to the National Assembly for inclusion in the country’s tax laws.
“What we have taken into account is what are those basic necessities of life—food, accommodations, transportation, education, and health. We’ve deliberately identified those items. And we’ve removed almost all the taxes applicable to them, including no VAT,” Oyedele explained.
He further emphasised the committee’s approach to make basic needs more affordable for Nigerians, noting that public transportation, such as buses, would be entirely tax-free.
However, he clarified that there will be exemption to private hire services, like taxis, suggesting that the users of such services are not among the poorest Nigerians.
“We think that from the fiscal policy and tax perspective, we can make it more affordable for the Nigerian people to be able to afford those basic necessities. Share-passenger transportation is completely tax-free,” he added.
“However, if you hire a taxi, we assume that you’re not the poorest Nigerian, so you have to pay the tax. Whereas if you get into a bus, that will be completely tax-free. That’s what we’ve done so far.”
Oyedele also highlighted that the committee has recommended additional tax incentives to spur employment, particularly in the private sector. These measures include offering tax exemptions to companies that significantly expand their workforce.
“We’ve also developed some proposals where the government can give relief to private sector employers who provide transportation relief to their workers,” he noted. “Also, we have had proposals around more employment. So if an employer employs more people than they would normally do, they get some relief. That helps to stimulate employment generation.”
This latest measure is part of the federal government’s ongoing tax reform initiative, which was launched following the creation of the tax and fiscal policy committee by President Tinubu in August 2023.
The committee, headed by Taiwo Oyedele, a renowned tax expert, is responsible for formulating a new tax framework aimed at driving economic growth and development across the country.
Among the various reforms proposed by the committee are tax exemptions for low-income earners and potential increases in Value Added Tax (VAT), along with other measures designed to foster economic *stability* and growth.
