The Federal Government has said that ‘runs girls’ (commercial sex workers) will pay tax under the new laws.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, stated this in a now-viral video from a tax education session by the Redeemed Christian Church of God, City of David, Lagos.
Oyedele explained that upkeep money sent to dependants or relatives is not taxable, describing such transfers as “non-exchange transactions.”
The tax expert said: “If somebody is doing runs girls (sex worker), right, they go and look for men to sleep with. You know that’s a service. They will pay tax on it.”
According to him, the new laws do not differentiate between legitimate and illegitimate income sources.
“It just asks you whether you have an income. ‘Did you get it from rendering a service or providing a good?’ Then, you pay tax,” he explained.
Explaining further, Oyedele said money sent to relatives, friends or even strangers are not taxable, as they are considered as gifts.
He said: “You earn a certain amount of money and you have to send upkeep to your cousin, your brother, even a stranger, it doesn’t really matter.
“If the amount you are sending is money you are giving to them not because they have done something for you, then it is a gift. We call it a non-exchange transaction. That is not taxable.”
“One thing about the tax law is it does not separate between whether what you are doing is legitimate or not. It just asks you whether you have an income.
“Did you get it from rendering a service or providing a good? You pay tax.”
Oyedele, however, urged Nigerians to look at the broader context of the new reforms, which he described as the most far-reaching in the nation’s history.
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He said, “The starting point for me is always to give context. And the first thing, the first message, is a proverbial blind man and an elephant.
“Depending on the side of the elephant that they touched, they concluded what it was, maybe a fan, a wall, or a tree. But none of them got the right answer because they didn’t feel the big picture.”
According to him, the same mistake could be made if citizens focus only on one aspect of the sweeping tax changes.
He added, “One thing I can tell you is that the tax reforms enacted into law a few months ago, that will take effect from January next year, is the most transformative, most significant in our nation’s history.
“With over 200 significant changes and more than 400 pages combined, it is very easy and could be tempting to narrow it down to one issue. That would be making the same mistake as the blind man and the elephant.”
The reforms, he said, would impact individuals, business owners, employees, employers, and civil servants, with the aim of simplifying the tax system and improving compliance.
Recall that the new (reformed) laws are the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act.