The Chairman of the Presidential Committee on Fiscal Policy, Taiwo Oyedele, has announced a proposal to the federal government to remove taxes on essential goods and services.
These include food items, public transportation, house rents, and other basic necessities crucial to the well-being of citizens.
Oyedele made this disclosure during an interview with Channels TV in Abuja on Monday, highlighting that the proposal also seeks to exempt these basic necessities from value-added tax (VAT).
The proposal, according to Oyedele, is expected to be signed by President Bola Tinubu shortly and subsequently forwarded to the National Assembly for incorporation into the nation’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.