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HOW THE PERSONAL INCOME TAX CHANGES WILL AFFECT YOU - PART 3

Q5 - Why was the Consolidated Relief Allowance (CRA) and Personal Relief removed? Does it not amount to giving a relief with one hand and taking it back with the other?

A5 - No. One of the objectives of the tax reforms is simplification. The impact of the CRA and personal relief have been incorporated into the tax table such that the overall goal of exempting low income earners and reducing taxes for middle income earners is achieved. By integrating the reliefs into the tax brackets and rates, many taxpayers with basic education would be able to calculate their taxes with little or no assistance thereby achieving the dual objectives of lower tax burden and tax simplification.

Q6 - How about statutory deductions such as Pension and National Housing Fund contributions?

A6 - Statutory deductions, now referred to as eligible deductions, are still applicable under the new tax bills. These are contributions under the National Housing Fund, National Health Insurance Scheme, Pension Reform Act, interest on loans for developing an owner-occupied residential house, annuity or premium paid for life insurance, and rent relief up to N200,000 per annum.

Q7 - Where can we get more information about the tax reform bills?

A7 - Please visit our website fiscalreforms.ng and social media accounts for more information including copies of the tax bills..