New tax: President, governors to pay tax on income

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Ifueko Omoigui Okauru

Ifueko Omoigui Okauru

Henceforth the President, vice president, state governors and their deputies will pay taxes from their incomes as it is done by every other tax payer in the country in line with the Personal Income Tax (amendment) Act that was signed into law last year.

Chairman, Joint Tax Board, Ifueko Omoigui Okauru, said this yesterday in Abuja while addressing newsmen on the new tax laws.

Under the old law, the President, vice president, governors and their deputies were exempted from tax on their official emoluments.

The new act, according to the Federal Inland Revenue Service, took effect on June 14, 2011 when it was signed by the President.

The Personal Income Tax was last reviewed in 1993.

Omoigui said other provisions introduced into the new Act include a consolidated relief allowance of N200,000 plus 20 percent gross income as deductible allowance from one’s income before computing tax on the balance.

She said the new income tax rates and income tax table in the act provide closer income bands and lower income tax rates leading to reduction in tax payable by low and middle income earners.

The minimum tax rate for the lowest possible income earners which was previously 0.05 has been increased to one percent, Daily Trust gathered.

The new act will enhance administrative powers to tax authorities especially in the states with the provision of statutory qualifications for appointment as chairman and members of state Boards of Internal Revenue and provisions of basis for funding through them the retention of a percentage of tax collected.

Okauru also said the new act introduced a presumptive tax regime for the informal sector and other persons whose incomes are not easily verifiable.

Other provisions in the act include enhanced penalty provisions and sanctions for violation of the provisions of the act; provision of powers to the Minister of Finance to make regulations for the administration of the act.

“As noted, the law was conceived to bridge the gaps identified in the old act, especially with respect to its impact on the take home earnings of low and middle income earners, which is the band within which most of us fall,” she said.

Author: Business

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