The Federal Government of Nigeria has proposed a 50% tax relief for companies that increase salaries or provide transportation allowances to low-income workers.
This relief is part of a new tax reform bill aimed at improving workers’ welfare and boosting employment in Nigeria.
The proposed bill, known as “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act,” was submitted to the National Assembly. It includes special income tax deductions as incentives for companies adjusting salaries.
According to the bill, companies will receive a 50% tax deduction on expenses for salary increases, transportation subsidies, or allowances for workers earning N100,000 or less per month during 2023 and 2024.
However, any salary increase for employees earning above N100,000 monthly will not qualify for this tax relief.
The bill also includes benefits for companies hiring new employees in 2023 and 2024. Companies adding to their workforce and keeping these new employees for at least three years will qualify for the tax relief.
Additionally, the government will offer an Economic Development Incentive Certificate for companies investing in capital projects.
The Federal Government says this tax relief plan will help Nigerian companies support their low-income workers in the face of economic challenges and will motivate businesses to expand and create more jobs.
