It has been suggested by the Presidential Committee on Tax Reforms and Fiscal Policy that the lengthy list of officially payable taxes and levies—which presently numbers more than sixty—be reduced to a manageable single digit figure.
After delivering President Bola Tinubu his team’s first report on its “quick-win” accomplishments in the first 30 days, Committee Chairman Mr. Taiwo Oyedele informed reporters of this on Tuesday at the State House in Abuja.
Commenting on the fundamental aims of the comSpeaking alongside Mr. Zacch Adedeji, the acting chairman of the Federal Inland Revenue Service (FIRS), Oyedele clarified that the committee’s goal is to reduce the number of taxes at all levels of government to less than ten.
Speaking on the committee’s primary goals of changing Nigeria’s tax laws and removing barriers for companies operating there, the chairman stated that his team has begun rewriting the country’s tax code in order to establish a more uniform and efficient tax administration system.
Citing the situation with the Value Added Tax (VAT), he said that the country’s tax system could only be restructured by gathering stakeholders for discussions and bringing the matter before the National Assembly.
Additionally, Oyedele noted that there are unofficially more than 200 different taxes in Nigeria, which severely burden the populace and make life difficult for the populace. He emphasized that a small number of less than ten taxes account for approximately 96% of the total revenue collected by the federal, state, and local governments in the nation
He continued by saying that Nigeria is presently going through a crucial stage in the revision of its tax laws and regulations, and that the committee has communicated with the Senate and the House of Representatives in order to address the essential adjustments.
Oyedele went on to say that the committee has started holding stakeholder engagement and public consultations in order to address some of the controversies surrounding the VAT bill, adding that Nigerians alone will be able to provide solutions—not the legal system.
His words: “So all we did today was to formally present the report to Mr. President, but I will say that once we get the nod from Mr. President, it will be like just switching on the tap and then the implementation starts immediately.
“There’s so much work for us to do, this is just milestone number 1, it is what we call the quick wins. The second phase, which is where we are now, is the critical reforms. Those critical reforms involves even rewriting our major tax laws, addressing something that everybody in this room will be very much familiar with; multiplicity of taxes.
“We have over 60 taxes and levies, officially collectible by Federal Government, state governments and local governments. Unofficially, those taxes are over 200, making life difficult for our people. So the objective we have, and that’s what we’re working towards, is to bring all of that to a single digit.
“So the taxes at all levels of government combined, we think should be less than 10 because actually about 96%, actually more than that, of our revenue across federal, states, local governments, currently is generated from less than 10 taxes and we’ve seen countries like South Africa generating more than our entire national tax revenue from just one tax.
“So there’s no evidence to show, in fact, the contrary is true that the more the number of taxes you have, actually the less revenue you collect because it just creates the opportunity for leakages and some non-state actors collecting money and keeping it to themselves.
“We were speaking to traders, MATAN (Market Traders Association of Nigeria) and they said to us, people selling pure water in the market collect seven tickets every single day. Why should someone who is just trying to hawk pure water to keep body and soul together have to pay seven taxes on a daily basis? It doesn’t make a lot of sense to us.
“So now we are at that phase of rewriting our laws. We spent time with the Senate and we would also do the same thing with the House of Assembly and the whole idea is we think that some of the reforms we need to introduce we have to go to the constitution itself, lack of clarity about taxing rights between levels of government.
“We’re all familiar with the dispute around VAT (Value Added Tax). We think that the solution will not come from the courts, it will come from Nigerians coming together to say ‘actually, this is the best way to deal with these matters’.
“We have commenced our public consultation and stakeholder engagement, it’s opened until the 15th of November. I’m glad to inform you that after just a few days of opening up that platform for engagement, we have received inputs from every single state in Nigeria and we’re just starting.”
Additionally, President Tinubu has directed that all federal ministries, agencies, and departments immediately follow all recommendations made by the Presidential Fiscal Policy and Tax Reform Committee.
The decision was issued by the president on Tuesday at the State House in Abuja, following his receipt of the committee chaired by Taiwo Oyedele’s report on its swift wins.
After the meeting, Special Adviser to the President on Media and Publicity, Ajuri Ngelale, briefed reporters on the developments. She revealed that President Tinubu had instructed his Policy Coordination Advisor, Hadiza Bala-Usman, to communicate with Oyedele and the Secretary to the Government of the Federation (SGF) in order to ensure that the directive is implemented effectively.
He states that the goal of the instruction to elevate the recommendations throughout government agencies is to guarantee that there is efficient assimilation and synergy in the process of putting them into practice.
His words: “After listening to a presentation by the committee chairman, the president directed the Special Adviser to the President on Policy Coordination, Bala-Usman, to liaise with the Secretary to the Government of the Federation and the Chairman of the Tax Policy Review Committee to ensure that the recommendations of the committee are swiftly and immediately implemented across all ministries, departments and agencies of the Federal Government to ensure that there is effective synergy and to ensure that every institution of the Federal Government is on the same page with respect to how tax policy will be implemented. “
“Henceforth, Mr. President has also made available an opportunity for the recommendations of the tax policy review committee to be made a topmost priority at the next sitting of the Federal Executive Council meeting on Monday. Mr. President will continue to emphasise the importance of ensuring that our tax authorities are not taxing the seed, but are taxing the fruit and that will continue to be the focus,” Ngelale further said
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