From Adanna Nnamani, Abuja
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that the proposed tax reforms bill currently at the National Assembly will provide much-needed relief to low-income earners while creating a more business-friendly environment.
Oyedele, who spoke over the weekend at the 2025 Annual General Meeting of the Finance Correspondents Association of Nigeria (FICAN) in Abuja, criticised the current tax system, describing it as one that disproportionately burdens the poor and discourages economic growth.
He explained that the existing tax structure places excessive levies on capital rather than focusing on profits, making it difficult for businesses to thrive.
According to him, multiple taxes and tax-collecting agencies have created a frustrating and unproductive environment for businesses, leading to closures and economic stagnation.
“The multiplicity of taxes and taxing agencies places an excessive burden on businesses, leading to frustration and closures across the country,” he said.
The proposed tax reforms, Oyedele noted, aim to simplify Nigeria’s tax regime, making it more transparent and attractive to both local and foreign investors. He also warned that allowing tax evasion to persist discourages honest businesses and individuals who diligently pay their taxes.
Regarding concerns over the distribution of Value Added Tax (VAT) revenue among states, he said the committee is engaging stakeholders to ensure a fair and transparent process.
“We have been engaging and will continue to engage with our key stakeholders in this regard to ensure that all concerns are satisfactorily addressed in our collective interest,” he said.
He assured that targeted tax reliefs and exemptions had been incorporated to cushion the effects of VAT increases on low-income households.
In his presentation, Dr Paul Alaje, Chief Economist at SPM Professionals, noted potential risks, particularly regarding the planned increase in VAT from 10% in 2025 to 12.5% in 2026. He noted that while the VAT hike could raise inflationary concerns, expanding the tax net to include freelancers and self-employed individuals might improve compliance and revenue collection.
Alaje also warned that adjusting the VAT revenue-sharing formula could favour economically stronger southern states, potentially widening the gap between the North and South. He urged the government to implement the reforms gradually and engage all stakeholders to ensure balanced economic benefits.