The National Assembly has passed a new law, the National Housing Fund (Establishment) Act 2018.

The key provisions of the Bill include the following:

Mandatory 2.5% contribution of monthly income by employees earning minimum wage and above in public and private sectors2.5% of income by self-employed individuals2.5% on cement, locally produced or importedEmployers are to deduct and remit the contributions monthlyThe penalty for non-compliance of up to N100 million for corporates and N10m for individualsSanctions include cancellation of operating licence of banks, insurance companies and PFAs for violationsWithdrawal by contributors who have attained the age of 60 years or 35 years of service to be at an interest rate of 2% per annumThe Fund and any refund of contributions are exempted from payment of taxes

10 reasons why the proposed law is a bad idea:

The contribution is regressive as it taxes the poor more than the rich. For instance, minimum wage earners will pay about 250% of their personal income tax (PAYE) to the NHF monthlyMaking all employers liable to deduct and remit the contributions monthly (without a threshold) will worsen the ease of doing business and Nigeria’s paying taxes rankingCost of borrowing will increase as banks are required to invest a minimum of 10% of their profits at 1% above current deposit ratesIncreasing the tax burden without addressing other fundamental issues like land regulation, REITS framework etc is not consistent with the 2017 National Tax PolicyImposition of the 2.5% levy on cement is a tax on property development which will make housing even less affordableThe 12 years statute of limitation is too long, this increases the risk to employers and encourages laxity on the part of the governmentThe penalty regime is draconian, excessive and not commensurate with the violationsThe requirement for PFAs to invest pension funds in the scheme means fewer returns for pension contributors which will erode value for pensionersThe return of 2% per annum for contributors withdrawing after attaining 60 years of age or 35 years of service is far below the inflation rate and grossly insufficient to compensate for the time value of moneyThe exemption from tax clause is badly worded, it means refunds are exempt but contributions are taxable.

The National Housing Fund (NHF) was established by the NHF Act of 1992 to facilitate the mobilisation of funds for the provision of affordable housing for Nigerians. Unfortunately, 27 years after, affordable housing for Nigerians remains a dream.

While the proposed law may be well-intentioned, availability of funds will not of itself address the myriad of challenges facing the housing sector which centre mostly on policy and regulations. Nigeria should, therefore, adopt a holistic approach to the issue of which affordable financing is only a component. The fact that there is no marked progress to show for the 27 years of establishing the NHF is proof that Nigeria’s housing problem cannot be solved by simply throwing more money at the problem.

SOURCE: https://brandspurng.com/2019/03/16/national-assembly-passes-new-housing-law-to-impose-over-200-of-personal-income-tax-on-low-income-earners/

postbox:
The National Assembly has passed a new law, the National Housing Fund (Establishment) Act 2018.

The key provisions of the Bill include the following:

Mandatory 2.5% contribution of monthly income by employees earning minimum wage and above in public and private sectors2.5% of income by self-employed individuals2.5% on cement, locally produced or importedEmployers are to deduct and remit the contributions monthlyThe penalty for non-compliance of up to N100 million for corporates and N10m for individualsSanctions include cancellation of operating licence of banks, insurance companies and PFAs for violationsWithdrawal by contributors who have attained the age of 60 years or 35 years of service to be at an interest rate of 2% per annumThe Fund and any refund of contributions are exempted from payment of taxes

10 reasons why the proposed law is a bad idea:

The contribution is regressive as it taxes the poor more than the rich. For instance, minimum wage earners will pay about 250% of their personal income tax (PAYE) to the NHF monthlyMaking all employers liable to deduct and remit the contributions monthly (without a threshold) will worsen the ease of doing business and Nigeria’s paying taxes rankingCost of borrowing will increase as banks are required to invest a minimum of 10% of their profits at 1% above current deposit ratesIncreasing the tax burden without addressing other fundamental issues like land regulation, REITS framework etc is not consistent with the 2017 National Tax PolicyImposition of the 2.5% levy on cement is a tax on property development which will make housing even less affordableThe 12 years statute of limitation is too long, this increases the risk to employers and encourages laxity on the part of the governmentThe penalty regime is draconian, excessive and not commensurate with the violationsThe requirement for PFAs to invest pension funds in the scheme means fewer returns for pension contributors which will erode value for pensionersThe return of 2% per annum for contributors withdrawing after attaining 60 years of age or 35 years of service is far below the inflation rate and grossly insufficient to compensate for the time value of moneyThe exemption from tax clause is badly worded, it means refunds are exempt but contributions are taxable.

The National Housing Fund (NHF) was established by the NHF Act of 1992 to facilitate the mobilisation of funds for the provision of affordable housing for Nigerians. Unfortunately, 27 years after, affordable housing for Nigerians remains a dream.

While the proposed law may be well-intentioned, availability of funds will not of itself address the myriad of challenges facing the housing sector which centre mostly on policy and regulations. Nigeria should, therefore, adopt a holistic approach to the issue of which affordable financing is only a component. The fact that there is no marked progress to show for the 27 years of establishing the NHF is proof that Nigeria’s housing problem cannot be solved by simply throwing more money at the problem.

SOURCE: https://brandspurng.com/2019/03/16/national-assembly-passes-new-housing-law-to-impose-over-200-of-personal-income-tax-on-low-income-earners/

Are you retired from active service and yet to get your NHF REFUND and would like to assisted
Contact Frank (Licensed Risk Adviser) on
07033895094 or
08148701491 or

https:///L9xtPnBOmqECpUuGvox3QI

Alozie.obilo@yahoo.com or
Alozie.obilo.f@gmail.com

https:///L9xtPnBOmqECpUuGvox3QI

Are you retired from active service and yet to get your NHF REFUND and would like to assisted
Contact Frank (Licensed Risk Adviser) on
07033895094 or
08148701491

Alozie.obilo@yahoo.com or
Alozie.obilo.f@gmail.com

https:///L9xtPnBOmqECpUuGvox3QI

Are you retired from active service and yet to get your NHF REFUND and would like to be assisted or do you know anyone in this situations

Contact Frank (Licensed Risk Adviser) on
07033895094 or
08148701491 or

Alozie.obilo@yahoo.com or
Alozie.obilo.f@gmail.com