The Federal Government has exempted low-income earners on N30,000 per month and below from paying personal income tax.

Taxmobile.Online gather that this is part of the key changes in the newly amended Finance Bill 2020 which was recently signed into law by President Muhammadu Buhari and took effect from January 1, 2021.

Expert Opinion

Taiwo Oyedele, a West Africa Tax Leader and Fiscal Policy Partner, PricewaterhouseCoopers (PWC),  has asked employees that earn less than N30,000 to tell their employers to stop deducting Pay As You Earn (PAYE) from their salaries with effect from this month.

Oyedele also disclosed via his Twitter handle on Wednesday 6th, January 2020 that low income-earners should o go as far as reporting to the authorizes should in case any employer failed to implement as directed by the Federal Government

He tweeted,

“Good news! If you’re a low-income earner on N30k per month or less, you’re now exempted from personal income tax based on the new Finance Act. So, tell your employer to stop deducting PAYE from your pay effective from this month.”

Significance

The tax and fiscal policy expert pointed out that this exemption addresses the problem faced by small business owners, who become vulnerable to extortion by unscrupulous tax officers during tax audits, as most of them do not deduct PAYE from low-income earners.

This also increases the disposable income that is available for the workers in the category to spend and possibly save as well.

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2 thoughts on “TAX RELIEF: FG Exempts Low-Income Earners From Personal Income Tax as Expert Charges Employees To Report Employers Still Deducting PAYE from Their Salaries

  1. This is good news. Please, will low cost schools who pay maximum of #25,000 to staff in Lagos State also be exempted? I asked because this is federal government directives. Thanks.

    1. This new policy covers every firm irrespective of the sector in the low income earning category as the Federal Government is the central regulatory body of Personal Income Tax and also has a stake in the PAYE Tax. Recall that constitutionally, PIT is a federal obligation mandatory to be remitted to the Inland Revenue Services of any state resided in by the salary earner. Regarding the Tax Relief, Private school owners should ensure that effective from this month they should demand accountability on tax officials referencing the newly enacted Finance Act. Check the link for more detail on the tax policy.

      https://pwcnigeria.typepad.com/tax_matters_nigeria/2021/01/20-key-changes-in-the-new-finance-act-2020-you-should-be-aware-of.html?utm_campaign=5a78693e94a32673ae004919&utm_content=5ff58e2a9115bf0001096a52&utm_medium=smarpshare&utm_source=twitter

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