Tax reforms: Workers unimpressed with marginal salary rise

Some workers have expressed mixed and largely underwhelming reactions to recent changes in their take-home pay following the implementation of new Personal Income Tax reforms, with many stating that the increases are marginal and insufficient to meaningfully alleviate economic pressures.

According to The PUNCH, the new tax reform laws introduce several adjustments to the PIT regime. Individuals earning the national minimum wage or less are now exempt from personal income tax, while employees with an annual gross income of up to N1.2m, equivalent to about N800,000 in taxable income, are also exempt. The reforms further provide for reduced Pay-As-You-Earn tax for those earning up to N20m annually and exempt gifts from taxation.

Despite these changes, several workers told The PUNCH on Monday that the impact on their salaries has been modest. A banker, Adetunji Morgan, said his salary rose by about N5,000 following the adjustment. “Yes, the salary increased. I think it increased by about N5,000 for me,” he said.

A Lagos State civil servant, Adedayo Lawal, said it was difficult to determine the exact effect of the PAYE reduction on his earnings without reviewing his payslip. He explained that a Yuletide allowance paid in December further complicated the assessment. “We were given a Yuletide allowance in December, but only 50 per cent of it was paid, with a promise that the second part would be paid this month,” he said, adding that he was not expecting a significant increase.