Our analysis reveals that the proposed tax will benefit low-income Nigerians, while higher earners will face increased taxes.
Lower Taxes for Low-Income Earners
Nigerians earning below N1,450,000 monthly (excluding statutory allowances) will pay less tax. Specifically:
- Those earning below minimum wage: exempt from taxes.
- Minimum wage earners (N70,000 monthly): taxes drop from N3,326 to N500.
- N250,000 monthly earners: taxes decrease from N29,100 to N27,500.
Higher Taxes for the Super-Rich
- Individuals earning above N50 million annually (N4.4 million monthly) face significantly higher taxes. Notably:
- Earners above N3 million monthly: effective tax rate exceeds 20%.
- Current system: no individual pays more than 20% in effective taxes.
Tax Comparison Across Salary Ranges
Our analysis highlights the proposed tax system's progressive nature, benefiting low-income Nigerians while increasing taxes on high-income earners.
Source:
https://nairametrics.com/2024/10/17/proposed-income-tax-bill-here-is-how-much-tax-you-might-pay-from-your-salary/
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