Abuja – The president and vice president of the country are now to pay tax under the Amended Personal Income Tax Act 2011.
Mrs Ifueko Omoigui-Okauru, Chairman, Federal Inland Revenue Service (FIRS) announced this on Monday in Abuja, while addressing newsmen on the Amended Personal Income Tax.
Under the act, governors and their deputies would also pay tax on all their income, as is done by other tax payers in the country.
The Personal Income Tax Bill was passed by the National Assembly in May 2011 and signed into law by the President Goodluck Jonathan on June 14, 2011.
“We have in the amended act included income from bonds issued by government and corporate entities, as tax exempt income.’’
The FIRS chairman said that the “official emoluments of president, vice president, governors and deputy governors are no longer exempted income. So they are all now to pay tax.”
She said that the act had a more equitable tax system as it introduced a realistic tax rate and effective tax administration system with clear definition of jurisdiction among the three tiers of government.
“In the spirit of multiple taxation, one of the clear recommendations is that the local governments should have absolutely no taxing powers.
“And if any revenue should be generated be it by levy or whatever, it should be done on behalf of the local government by the state.’’
She said that the Act was amended to bring the Personal Income Tax Act up to date with the existing realities of the Nigerian economy.
She noted that the Act was conceived to ensure that the Personal Income Tax was administered equitably and its major provisions reflected the focus of the overall tax reform.
The FIRS chairman said that the Act had removed the unrealistic reliefs and allowances from the old Act such as N2,500 per annum for children subject to a maximum of four children.
“The amended Act provided for consolidated relief and allowances, a consolidated relief allowance of N200,000 plus 20 per cent of gross income as deductible allowance from income before computing tax on balance.’’
She said the new Act “has demonstrated that government has a listening ear and reduced the overall burden on low and middle income earners.
“It is, however, recouping these from high net worth individuals, who will be expected to bear a higher burden given their level of earning.’’ (NAN)
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Jonathan, VP, governors now to pay tax on allowances – FIRS