The Federal Government is working towards implementing a single-digit tax regime to alleviate the burden of multiple taxes on Nigerians.
This was disclosed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms, during an interview on Channels Television’s *Hard Copy*.
Oyedele explained that once the ongoing tax reforms are completed, the number of taxes imposed on individuals and businesses will be reduced to single digits, aiming for less than 10 taxes to be paid within a given period.
“Our hope is when we are done with our reforms, all the taxes will be down to single digit,” Oyedele stated.
He further emphasized that the reforms would involve enhanced cooperation between tax authorities and state governments in areas such as data sharing, tax intelligence, and capacity building.
“We want to be able to let the authorities trained on tax matters collect taxes while others focus on primary mandates and watch the economy grow in a way that benefits everyone,” Oyedele said.
Oyedele highlighted that the Nigerian tax system is currently one of the most backward in the world, describing the situation as “embarrassing.” He expressed hope that the ongoing reforms would address these issues and lead to more efficient and modern tax administration.
“We are in 2024, and anything that will stop the reforms of Nigeria’s tax system will be really sad and I think we can work out the differences for the process to continue and for the bills to be enacted,” Oyedele added.
On his X (formerly Twitter) account, Oyedele reiterated the government’s commitment to reducing the overall tax burden on Nigerians while ensuring sufficient revenue generation for the country. He emphasized that the reforms are aimed at simplifying the tax system, harmonizing taxes, and addressing barriers to investment.
“The plan is to reduce the overall tax burden, not increase it. By simplifying the tax system, harmonising taxes and addressing impediments to investments, the reforms will boost economic activities and therefore enhance revenue generation for all tiers of government,” Oyedele stated.
He outlined several strategies that would be implemented as part of the reform efforts, including the removal of disincentives to business formalisation, the use of technology and data for tax intelligence, and the simplification of the tax system. These reforms are expected to raise tax revenue without increasing the overall tax burden.
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“This will ensure that we can raise tax revenue without raising tax burden, through various strategies including removal of disincentives to business formalisation, use of technology and data for intelligence, tax simplification and enhanced administrative capacity. Beyond raising revenue, curbing tax evasion also ensures that there is a level playing field for all rather than implicitly penalising compliant taxpayers and rewarding evaders,” Oyedele explained.
The reforms are expected to benefit both small and large businesses. One of the proposals under consideration is the reduction of the corporate income tax rate from 30% to 25% over the next two years, along with the elimination of earmarked taxes on companies, to be replaced with a harmonised single levy at a reduced rate.
These reforms come amid public concerns over the rising burden of multiple and increasingly complex taxes under the administration of President Bola Tinubu. The government’s focus is on addressing these concerns while ensuring that the necessary revenue is generated for the country’s growth and development.
