Babatunji Wusu –
- Single-digit tax system: President Tinubu’s government aims to reduce all taxes to single digits to ease the tax burden on Nigerians.
- Focus on efficiency: Reforms include better coordination between tax authorities and states, using technology and data to improve tax administration.
- Tax system overhaul: A Nigerian tax administration bill aims to simplify tax processes and tackle inefficiencies.
- Corporate tax reduction: The corporate income tax rate will be cut from 30% to 25% over two years, and earmarked taxes will be replaced with a single, harmonized levy.
- Public concern: The reforms are partly in response to growing public discontent over multiple and rising taxes.
President Bola Ahmed Tinubu’s government is exploring a single-digit tax system to alleviate the burden of multiple taxes on Nigerians. In a recent interview on Channels Television, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms, explained that the ongoing tax reforms aim to reduce all taxes to single-digit rates once completed. This would mean that individuals and businesses would only pay a limited number of taxes, each under ten, over a given period.
Oyedele discussed the initiative during an interview centered on the topic “Tax Reforms: Why states should not collect VAT,” highlighting the committee’s efforts to improve coordination between tax authorities and state governments. This includes enhancing data sharing, tax intelligence, and capacity building.
“Our hope is when we are done with our reforms, all the taxes will be down to single digits,” Oyedele stated. He emphasized the goal of streamlining tax collection, allowing tax-trained authorities to handle collections, while other government bodies focus on their primary functions, ultimately fostering a more effective and efficient economy.
Oyedele also mentioned the importance of the Nigerian tax administration bill, which aims to overhaul tax registration, returns filing, assessment, and audits, leveraging technology for improved tax administration. The government is engaging with legislators to ensure the passage of this bill, which Oyedele believes is critical to addressing Nigeria’s outdated and inefficient tax system, describing the current system as “embarrassing”.
In a post on his official X (formerly Twitter) handle, Oyedele reassured Nigerians that the federal government’s aim is to reduce the overall tax burden while still ensuring sufficient revenue generation. The planned reforms are designed to simplify the tax system, harmonize taxes, and eliminate barriers to business investment, which in turn will stimulate economic activity and enhance revenue for all tiers of government.
Key strategies to boost tax revenue without increasing the tax load include removing disincentives to business formalization, leveraging technology and data for tax intelligence, and simplifying the tax process. Oyedele stressed that these reforms will create a fairer playing field by tackling tax evasion and ensuring that compliant taxpayers are not unfairly burdened.
In particular, the reforms include a reduction of corporate income tax from 30% to 25% over the next two years, as well as the elimination of earmarked taxes on companies, to be replaced by a harmonized single levy at a reduced rate.
These changes come in response to growing public concern over the rising and often complex tax landscape under President Tinubu’s administration.
