THERE has been a misconception that giving tax incentives to the rich helps incentivise job creation because the capitalists are perceived to be job creators. The truth is, it does not. The ordinary consumer is more of a job creator than a capitalist. Business people taking credit for creating jobs is highly unfair. Business people hire workers as their last resort, as they only hire to keep pace with the consumer demand. The Nigerian Personal Income Tax Act is unfair for allowing fixed tax rate for resident companies, while varying personal income tax rates. The rigidity of the resident company tax rate allows for unnecessary overgrowing of few companies and making many more to close down. Small, medium and big companies pay 30 per cent of their profits as tax irrespective of their returns and size. Consequently, the rich are getting richer and more citizens that are of middle class are relegated. Statistics have shown that
we have a higher number of unemployed people as the number of millionaires continues to increase over time. If millionaires can create jobs, we will not have the level of unemployment we are having now in the country, which is as high as 23.9 per cent, excluding the estimated 30 per cent more that are under-employed. The individual consumer needs to be incentivised. If the minimum wage is to keep pace with the inflation rate, the minimum wage would have been anything above N25,000 by now, just within five years since it was reviewed to N18,000. Jobs are a consequence of eco-systemic feedback loop between customers and businesses. If the middle class thrives and does well, both the capitalist and the poor benefit. Therefore, let the rich be taxed more, so that we can create more middle class people who consume more and then create jobs by virtue of their consumption. The company tax system
should be proportionate to the income level. Businesses with profit less than N80 million should be taxed at 25 per cent. Business profits above N80 million, but not up to N500 million, should be taxed at 30 per cent. Any profit margin above N500 million should be taxed at 35 per cent. This should not include companies operating in the petroleum sector. There should not be credit breaks for big companies unless for special circumstances. However, tax breaks can be allowed for small and medium companies. The minimum wage should be upgraded to N25,000. With the ongoing austerity measures, government expenditure (recurrent) must be reduced by at least 10 per cent every year for four years. The tax rates should be increased and compliance enforced. Compliance will not be a big deal because people now have trust and confidence in the government. Ahmed Adamu, Abuja


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