The Federal Government of Nigeria is offering a 50% tax relief to companies that raise salaries or provide transportation allowances for low-income workers.
This initiative is part of a new legislative bill aimed at overhauling the country’s tax system to support workers amid rising living costs.
The proposed law, titled “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 to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,” is dated October 4, 2024, and was obtained from the National Assembly.
This relief will apply for the 2023 and 2024 assessment years, encouraging companies to support employees amid economic challenges.
A section of the bill read, “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 –
“(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 ₦100,000.00; provided that any additional award or salary increase to an employee earning above ₦100,000.00 as monthly salary shall not qualify for the additional deduction under this subsection; and
“(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.”
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