This announcement was made by Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms during a presentation in Abuja at the 53rd annual conference of the Institute of Chartered Accountants of Nigeria.
Oyedele stressed that the existing 62 taxes imposed across various government levels place a heavy burden on Nigerian businesses and taxpayers. The move to reduce the number of taxes aims to simplify the tax system and alleviate this burden.
He also expressed concern over the numerous informal taxes being collected across the country.
“At the federal level. The list is somewhere close to 16 officially at the state level 25 Local Government 21 But this is just the beginning of the story. The story is incomplete. Until you add the over 108 informal taxes collected all over the place, sometimes by non-state actors that have been empowered, either passively or actively by the government,” he said.
He further stated, “What I want and hope to achieve is the reduction of the number of taxes to less than 10, yes, we want a single digit, and we want to cut down revenue collection agencies to one for each tier of government.”
Moreover, Oyedele noted a series of critical challenges that Nigeria must address, including issues like poverty, limited revenue, escalating debt levels, dwindling investments, and the rising trend of youth emigration out of the country, Nairametrics reported.
“We have widespread poverty, government’s revenue is low and as a consequence, public debt is high. And the debt service to revenue ratio is one of the highest we’ve seen anywhere in the world. Investment is declining and you cannot have economic growth without investments.” he stated.
Nigeria’s President, Bola Ahmed Tinubu, is determined to boost the country’s tax revenue, aiming to raise it from the current 11% of the gross domestic product (GDP) to 18% within a three-year timeframe. To achieve this ambitious goal, several measures are being put into motion.
One such move is to overhaul its tax system to shift more of the burden to wealthy citizens while cutting corporate taxes. A tax amnesty to encourage compliance is also under consideration.
The plan is to make “the rich pay what is fair and those who are too poor can be protected,” Taiwo Oyedele once said in an interview with Bloomberg.
According to him, Nigeria’s tax revenue as a share of GDP is a third of the 34% average for members of the Organisation for Economic Co-operation and Development. Among 4 million registered firms, less than 250,000 actively pay tax, while fewer than a quarter of the 41 million registered people pay income tax.
The Nigerian federal government collected N2.83 trillion ($6.175 billion) in company income tax (CIT) in 2022, a 116% increase from the previous year.
