A Review of the Nigerian Energy Industry

PENGASSAN wants immediate law on Personal Income Tax


27 August. 2011, Sweetcrude, Lagos – The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has urged the immediate signing into law of the Nigerian Personal Income Tax (Amendment) bill.

The bill, according to the association, would bring the principal Act provisions in line with existing realities to ensure easier compliance with the provisions, and also bring about a higher level of voluntary compliance on the part of the taxpayers.

The association, in a letter titled, ‘PENGASSAN’s Humble Appeal for Mr. President Assent to the Personal Income Tax (Amendment) 2010 Bill,’ called on President Goodluck Jonathan to sign the bill into law without further delay, noting that the bill is in the interest of social justice and the public interest to ultimately ensure the realisation of its laudable objectives.

The letter, signed by the General Secretary of the union, Mr. Bayo Olowoshile, said the bill – when signed into law – would also help to bring the provisions of the Personal Income Tax Act in line with modern reality in view of the current high tax burden that is inadequately moderated by absurd personal allowance and reliefs.

The association observed that since the advent of the civilian administration in 1999 and after over 12 years of constitutional democracy in Nigeria, the nation had been patiently enduring the Personal Income Tax Decree No.104 (now Personal Income Tax Act (PITA), Cap P8 LFN 2004).

Specifically, it noted that since the enforcement of the Personal Income Tax Decree on August 25, 1993, it has never been amended nor reviewed to reflect the socio-economic reality.

“Mr. President would indeed agree that the existing Personal Income Tax Reliefs to taxpayers are irrational unfair and inequitable with socioeconomic costs and living standards thus impacting excessive and regressive taxation on the Nigerian workers, thereby encouraging tax evasion and discouraging voluntary compliance.

“For instance, in the current Personal Income Tax Act, the maximum amount of relief available is for a maximum of four children at N2,500 for each child per annum, which sum up to N10,000. Also absurd is the N2,000 per annum relief for dependant relatives. Same concerns are also raised on other reliefs in PITA 2004 as they do not reflect the true motive of law towards assuaging the burden of taxpayer,” the union stated.

The association said it supported the views expressed by stakeholders, which culminated in the Presidency forwarding an Executive Bill to the National Assembly for amendment.

The association lauded the 6th National Assembly for prompt passage of the bill and appealed to President Jonathan to do same, adding that the signing of the bill into law will have a multiplier effect on revenue accruing to government.

“PENGASSAN strongly believes that with the high pool of voluntary taxpayer, there will be multiplier effect of higher tax revenue to the government. It will equally enhance the ability of tax authorities to assess, collect and account for taxes imposed under the Act. Moreover the amendment also seeks to align the Principal Act with the National Tax Policy,” it stated.

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