Taiwo Oyedele assured that inheritance tax will not be reintroduced in Nigeria’s tax reform bills. He clarified that Section 4, Subsection 3 pertains to family income taxation, not inheritance. Moreover, claims regarding significant capital flight from Nigeria due to tax policies were dismissed. Industry leaders raised concerns about incentives and compliance for manufacturers in free zones. Ultimately, the government aims to enhance tax structure while supporting economic growth.
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, addressed concerns about the potential reintroduction of inheritance tax in Nigeria during a public hearing on tax reform bills held by the House of Representatives. He clarified that Section 4, Subsection 3 of the tax bill, which refers to family income taxation, has been misconstrued. Oyedele emphasized that income taxation differs from inheritance, as income pertains to revenue generated while inheritance relates to assets passed down.
He stated that the existing provision in the Personal Income Tax Act has been in place since Nigeria’s independence and supports that income earned by families should be taxed appropriately to prevent tax evasion. Oyedele explained that if a family generates income through rental properties, it should be taxed accordingly, regardless of whether it is attributed to specific family members.
In his comments on free zones, Oyedele disputed claims that 70% of investors had withdrawn investments due to unfavorable policies, asserting that the physical cash in circulation is approximately four trillion naira, which is intended for small transactions. He noted that the overall money supply remains stable, with digital transactions amounting to over one quadrillion naira last year.
Zach Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), criticized manufacturers in free zones who attempt to sell products in customs areas but do not comply with tax obligations. He remarked, “No responsible government will turn a blind eye and allow individuals who have either not read the law or have only read it halfway to initiate litigation or threaten to leave the country.”
The President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye, praised the government for the proposed tax bills but raised concerns about insufficient incentives for exporters. He opposed unrestricted sales into Export Free Zones, suggesting a cap of 25% for goods sold locally, consistent with international standards. Meshioye also commended the reduction of corporate income tax as a supportive measure for economic growth.
In summary, Taiwo Oyedele reaffirmed that the new tax reform bills will not reinstate inheritance tax, while providing clarity on the distinction between inheritance and income taxation. Additionally, stakeholders expressed mixed reactions regarding the impact of tax policies on investment in free zones and proposed measures for better tax compliance and incentives for manufacturers. These discussions reflect ongoing efforts to balance taxation with economic growth in Nigeria.
Original Source: www.zawya.com
