‘The lower the multiple, the more the state is trying to get as many people as possible to contribute to whatever taxes pay for’. This articulates it best. Just adds to the evidence that tax payment as both a form of social contract and revenue generation was never part of the Nigerian framework. Thanks for simplifying these aspects.
Also, I actually like that corporate rates were reduced but the so called “development” levy would reduce the effective reduction. But a reduction it is still how ever slightly.
I feel that Nigeria should have gone for an Irish style low rate of at least 10% with deeply generous capital expensing (100%+) which is expensed immediately and not over time. The capital expensing schedules I saw in the version of the bill floating around last year are too low and are done over a period of years.
An Irish style corporate tax rate, with super generous capital expensing, along with with corporate tax incentives for the list of industries listed in the bill for incentives, implemented immidiately could usher back in much needed growth.
Thanks for this! I love the way you broke down this aspect of the bill. Crazy to see how much the naira has been devalued. A thousand percent devaluation is diabolical, man.
I do agree with you on one thing: what rather shocked me about the debate over this bill was the next to do debate about the implications of the personal and corporate tax rates on things like global competitiveness, savings, investment, productivity etc.
I tried reading the bill late last year when a version was floating around and felt it was too long and had a list of issues and questions I had just off the bat.
But with that said, and I’m say where my cards are, I totally oppose it stated aim of increasing the tax/GDP ratio to 18%. But on a positive note I doubt that that target would be achieved (refer to the Laffer curve explanations of how wishing higher rates produces more revenue does not magically appear - another aspect I felt was missing from the whole debate and which points to how low the quality of conversation around the bill was).
But on the positive side, since from the analysis you have done it appears high earners might actually see a tax cut, then this is good. I know this might be unpopular to say, but it’s high earners who make all the investment and set up businesses etc.
‘The lower the multiple, the more the state is trying to get as many people as possible to contribute to whatever taxes pay for’. This articulates it best. Just adds to the evidence that tax payment as both a form of social contract and revenue generation was never part of the Nigerian framework. Thanks for simplifying these aspects.
Also, I actually like that corporate rates were reduced but the so called “development” levy would reduce the effective reduction. But a reduction it is still how ever slightly.
I feel that Nigeria should have gone for an Irish style low rate of at least 10% with deeply generous capital expensing (100%+) which is expensed immediately and not over time. The capital expensing schedules I saw in the version of the bill floating around last year are too low and are done over a period of years.
An Irish style corporate tax rate, with super generous capital expensing, along with with corporate tax incentives for the list of industries listed in the bill for incentives, implemented immidiately could usher back in much needed growth.
Thanks for this! I love the way you broke down this aspect of the bill. Crazy to see how much the naira has been devalued. A thousand percent devaluation is diabolical, man.
Even typing it I almost couldnt believe it. Nigeria has been through a lot to put it mildly
Curious to know where this takes out tax to GDP ratio at the end of the day .
The stated goal is 18% tax to GDP ratio. That is super ambitious. We will see where things land
I do agree with you on one thing: what rather shocked me about the debate over this bill was the next to do debate about the implications of the personal and corporate tax rates on things like global competitiveness, savings, investment, productivity etc.
I tried reading the bill late last year when a version was floating around and felt it was too long and had a list of issues and questions I had just off the bat.
But with that said, and I’m say where my cards are, I totally oppose it stated aim of increasing the tax/GDP ratio to 18%. But on a positive note I doubt that that target would be achieved (refer to the Laffer curve explanations of how wishing higher rates produces more revenue does not magically appear - another aspect I felt was missing from the whole debate and which points to how low the quality of conversation around the bill was).
But on the positive side, since from the analysis you have done it appears high earners might actually see a tax cut, then this is good. I know this might be unpopular to say, but it’s high earners who make all the investment and set up businesses etc.