Tax Reforms: Nigeria To Streamline Over 200 Taxes and Levies To Under 10

The Presidential Committee on Tax Reforms and Fiscal Policy on Tuesday has recommended pruning of the long list of officially collectable taxes and levies, which currently exceeds 60, into manageable single-digit number.

Chairman of the Committee, Mr. Taiwo Oyedele, made this known to newsmen on Tuesday after submitting his team’s maiden report on its ‘quick-win achievements in the first 30 days to President Bola Tinubu at the State House, Abuja .

Oyedele, who spoke in the company of the Acting Chairman of the Federal Inland Revenue Service (FIRS), Mr Zacch Adedeji, explained that the committee’s aim is to consolidate these taxes at all levels of government, reducing the total number to less than 10.

Commenting on the fundamental aims of the committee on reforming the nation’s tax policy and removing impediments against businesses in Nigeria, the Chairman said his team has started rewriting the nation’s tax laws as part of the process of birthing a standard and more effective tax administration.

According to him, the task of restructuring the tax system in the country will not be achievable through the courts, citing the circumstances around the Value Added Tax (VAT), but by assembling stakeholders for deliberations and approaching the National Assembly.

Oyedele also added that unofficially, there are more than 200 different taxes in Nigeria, which significantly burden the population and make life challenging for the citizenry, stressing that approximately 96% of the total revenue collected by the federal, state, and local governments is derived from a small set of fewer than 10 taxes in the country.

He added that Nigeria is currently at a critical phase of revising its laws and regulations on taxation, adding that the committee had interfaced with the Senate and the House of Representatives with the objective of addressing all necessary reforms.

Oyedele further stated that the committee had commenced public consultation and stakeholder engagement on tackling some of the controversy around the VAT law asserting that solutions will only come from Nigerians and not from the law court.

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 taxis. 

“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”, he said.

President Tinubu has also ordered the immediate implementation of all recommendations by the Presidential Fiscal Policy and Tax Reform Committee across federal ministries, agencies and departments.

The President gave the directive Tuesday after receiving the report on the quick-win achievements of the Taiwo Oyedele-led Committee at the State House, Abuja.

Briefing newsmen after the meeting, Special Adviser to the President on Media and Publicity, Ajuri Ngelale, disclosed that President Tinubu has directed his Adviser on Policy Coordination, Hadiza Bala-Usman, to liaise with the Secretary to the Government of the Federation (SGF) and Oyedele for the effective implementation of the presidential 

directive. 

According to him, the directive to escalate the recommendations across government establishments is to ensure there is effective synergy and assimilation when it comes to their implementation. 

His words: “After listening to a presentation by the committee chairman, the President directed the Special Adviser to the President on Policy Coordination, Hadiza 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. 

He also explained that the President promised to make the presentation of the recommendations a priority item when the Federal Executive Council (FEC) meets again on Monday.   

“Henceforth, Mr. President has also made available an opportunity for the recommendations of the tax policy review committee to be made a top most 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”, the President further said.

Deji Elumoye in Abuja

Follow us on: