Tinubu’s Government Mulls Overhaul of Tax System, Eyes Single-Digit Figures
The Chairman of the Presidential Committee on Fiscal and Tax Reforms, Taiwo Oyedele, revealed in a recent interview on Channels Television that the administration is working to simplify Nigeria’s tax system by reducing all taxes to single-digit figures.
According to Oyedele, this means that citizens and businesses will only have to pay less than ten taxes over a specific period. He emphasized the importance of improving collaboration between tax authorities and states, highlighting the committee’s focus on data sharing, tax intelligence, and capacity development.
“Our ultimate goal is to bring all taxes down to single digits,” Oyedele stated. “We want to enable trained authorities to collect taxes while others focus on their primary responsibilities and watch the economy grow in a way that benefits everyone.”
Oyedele noted that the Nigerian tax system is one of the most backward in the world, describing the situation as “embarrassing.” He expressed hope that the current reforms will lead to significant changes, saying, “We are in 2024, and anything that will stop the reforms of Nigeria’s tax system will be really sad.”
Oyedele also revealed that the federal government aims to reduce the overall tax burden on Nigerians while ensuring enough revenue is generated. The plan is to simplify the tax system, harmonize taxes, and address impediments to investments, thereby boosting economic activities and revenue generation.
The government is set to implement various strategies to ensure that tax income rises without elevating the tax load. These plans include eliminating obstacles that discourage businesses from becoming formal, leveraging technology, utilizing data for insights, and simplifying the tax system.
“We will achieve this by removing disincentives to business formalisation, using technology and data for intelligence, tax simplification, and enhanced administrative capacity,” Oyedele explained. “Beyond raising revenue, curbing tax evasion also ensures that there is a level playing field for all, rather than implicitly penalizing compliant taxpayers and rewarding evaders.”
Oyedele highlighted that the government reforms will benefit both small and large businesses, as there will be a harmonized single levy at a reduced rate. The proposals include reducing the corporate income tax rate from 30% to 25% over the next two years and eliminating earmarked taxes on companies to be replaced with a harmonized single levy at a reduced rate.
The development comes in response to public outcries over multiple and increasing taxation by President Tinubu’s administration.
