New Tax Law Sparks Outrage in Oyo State Amid Economic Hardship

On Thursday, the Oyo State House of Assembly passed the State Presumptive Tax Bill, 2023, into law. This new legislation is aimed at imposing, administering, and collecting taxes from individuals and entities whose incomes cannot be easily determined due to a lack of formal financial records. The Presumptive Tax Bill is designed to capture those in the informal sector who are not covered under the existing Pay-As-You-Earn (PAYE) system or whose business financial records are not maintained in a manner that allows for accurate assessment of their taxable income.

The presumptive tax targets a wide range of small-scale businesses and informal workers who typically operate without comprehensive financial documentation. This includes artisans, barbers, fruit sellers, bricklayers, carpenters, grinding mill operators, gas refill depot operators, hairdressers, horticulturists, photographers, plumbers, welders, auto mechanics, bookshop owners, and similar enterprises within the informal economy. The bill aims to bring these often-overlooked sectors into the tax net, ensuring they contribute to state revenue.

Despite the government’s intention to broaden the tax base, the new law has sparked concerns among residents of Ibadan, the state capital. Many citizens have voiced their dissatisfaction with the timing of the bill, citing the ongoing economic challenges facing the country. Some residents argue that the new tax would further burden low-income earners who are already struggling to cope with inflation and rising costs of living. They have called on the House of Assembly to prioritize addressing the immediate needs of the people, such as economic relief and support for the poor, before introducing new tax laws.

In response to the legislative move, several residents have appealed to Governor Seyi Makinde to withhold his assent to the bill, urging him to consider the current economic climate and the potential impact on citizens. They stress that imposing a new tax at this time would not be in the best interest of the public, especially when many are still grappling with financial instability.

The debate surrounding the Presumptive Tax Bill highlights the tension between the government’s need to generate revenue and the citizens’ demand for economic justice and relief in these challenging times. As the bill awaits the governor’s decision, the public continues to watch closely, hoping for a resolution that balances both state development and the welfare of the people.