Kehinde Fajobi
The Nigerian government is moving towards a single-digit tax regime to lessen the impact of multiple taxes on citizens and businesses, according to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms.
Oyedele discussed the reforms in an interview on Channels Television on Monday, explaining that the goal is to reduce the number of taxes to fewer than ten when the reform process is complete.
“Our hope is that when we are done with our reforms, all the taxes will be down to single digits,” Oyedele stated.
He noted that this approach would ease tax collection and allow the economy to grow in a way that benefits everyone.
“We want to let authorities trained in tax matters collect taxes, while others focus on their primary mandates.”
During the interview, titled “Tax Reforms: Why States Should Not Collect VAT,” Oyedele highlighted that his committee is working on a framework to improve collaboration between tax authorities and states, particularly in areas such as data sharing, tax intelligence, and capacity building.
Oyedele criticised Nigeria’s current tax system as one of the “most backward in the world,” describing the situation as “embarrassing.”
He expressed hope that legislative cooperation would allow these reforms to proceed, despite any potential obstacles, saying, “We are in 2024, and anything that will stop the reforms of Nigeria’s tax system will be really sad.”
On his X account on Monday, Oyedele further elaborated, noting that the government aims to reduce the tax burden while still ensuring sufficient revenue generation.
“The plan is to reduce the overall tax burden, not increase it. By simplifying the tax system, harmonising taxes, and addressing barriers to investment, the reforms will boost economic activities and enhance revenue generation for all tiers of government,” he explained.
Oyedele also outlined several strategies to raise tax revenue without increasing the tax burden, including using technology for tax administration, removing disincentives to business formalisation, and improving administrative capacity.
He said, “This will ensure that we can raise tax revenue without raising tax burden… Beyond raising revenue, curbing tax evasion also ensures a level playing field for all, rather than implicitly penalising compliant taxpayers and rewarding evaders.”
As part of these reforms, Oyedele indicated plans to reduce the corporate income tax rate from 30% to 25% over the next two years and replace specific taxes on companies with a unified levy at a lower rate.
He noted that these changes aim to support both small and large businesses through a simplified and reduced tax structure.
This announcement comes in response to widespread criticism over the increasing tax burdens and the complexities of the current tax system under President Tinubu’s administration.