A West Africa Tax Leader and Fiscal Policy Partner, PricewaterhouseCoopers (PWC), Taiwo Oyedele, has asked employees that earn less than N30,000 to tell their employers to stop deducting Pay As You Earn (PAYE) from their salaries with effect from this month.
Oyedele disclosed this via his Twitter handle on Wednesday.
READ: Taxes you should be aware of before starting a business in Nigeria
He tweeted, “Good news! If you’re a low-income earner on N30k per month or less, you’re now exempted from personal income tax based on the new Finance Act. So, tell your employer to stop deducting PAYE from your pay effective from this month.”
READ: Nigeria generates N1.29 trillion from taxes in Q2 2020, surpasses target
What you should know
The Federal Government has exempted low-income earners on N30,000 per month and below from paying personal income tax.
This is part of the key changes in the newly amended Finance Bill 2020 which was recently signed into law by President Muhammadu Buhari and took effect from January 1, 2021.
READ: FG proposes additional tax exemption for small businesses
What this means
The tax and fiscal policy expert pointed out that this exemption addresses the problem faced by small business owners, who become vulnerable to extortion by unscrupulous tax officers during tax audits, as most of them do not deduct PAYE from low-income earners.
This also increases the disposable income that is available for the workers in the category to spend and possibly save as well.
READ: How the Finance Bill will affect you
Good news!
If you're a low income earner on N30k p/mth or less, you're now exempted from personal income tax based on the new Finance Act. So tell your employer to stop deducting PAYE from your pay effective from this month.
Watch this space for more highlights of the new law.
— Taiwo Oyedele (@taiwoyedele) January 5, 2021
READ: Six firms face LIRS sanction over non-remittance of N42.68 million Income Tax
