The House of Representatives has exempted military personnel from the payment of personal income tax (PIT).
The decision was reached on Thursday following the adoption of a report on the tax reform bills.
The report also provides exemptions for certain agricultural businesses and other categories of income.
Personal income tax is imposed by the government on an individual’s earnings, including salaries, wages, bonuses, dividends, and other forms of income.
Section 164 of the Nigeria tax bill outlines the categories of individuals exempt from PIT.
Chairman of the finance committee, James Faleke, who moved the motion for the report’s consideration, said certain agricultural businesses are also exempted from Paying the PIT for the first five years of operation.
“In addition, wages and salaries of military officers have been proposed to be exempt from income tax,” he said.
The report also excludes certain categories of individuals and entities from PIT.
The report further highlighted that profits or gains from asset disposals are exempted for statutory or registered friendly societies, provided the income is not derived from trade or business.
Similarly, the committee said registered cooperative societies will enjoy tax exemptions if their earnings do not come from commercial activities.
It also said entities engaged in educational, religious, or charitable activities of public interest are also excluded, as long as their profits are not generated from business ventures.
Compensating payments that qualify as dividends or interest in regulated securities lending transactions are exempt, the report said.
The panel also said consular fees collected on behalf of a foreign state, along with the employment income of consular officers, are not taxable unless such earnings come from trade, business, or additional employment in Nigeria.
Income exemptions also extend to funds covered under the Diplomatic Immunities and Privileges Act and pension funds and assets established under the Pension Reform Act.
The report said death gratuities, compensation for injuries, and redundancy lump sum payments or other capital compensation for loss of employment are not taxable, adding that income from bonds issued by the federal or state government of Nigeria is also exempt.
The lawmakers also said individuals earning the national minimum wage or less are not required to pay PIT.
