Tinubu's tax reforms will end multiple taxation, says financial expert

A financial expert, Babatunde Salami, has said the new tax reform bills sent to the National Assembly by President Bola Tinubu can solve the problem of multiple taxation in Nigeria

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He said the proposed laws would also widen the tax net and base in the country.

Mr Salami, a former regional manager at First Bank PLC, said this in an interview with PREMIUM TIMES in Ilorin, Kwara State.

He noted that under the proposed tax regime, those earning less than N1 million annually would be tax-exempt while others would be taxed on a progressive basis from seven per cent to 24 per cent.

***A financial expert, Babatunde Salami***

He said making small-scale businesses earning less than N50 million tax-exempt would create an environment for them to thrive.

“We will no longer have the perennial problem of multiple taxation, as everything will now be unified rather than different entities collecting taxes. Nigeria is getting only six per cent of tax from commercial activities compared to South Africa, which is 22 per cent. The new reform will help to increase the tax base.”

CBN blamed for cash shortage

The financial expert blamed the Central Bank of Nigeria (CBN) for not being proactive enough to control the raging acute shortage of cash in the country.

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“The CBN, as the supervisory organ, must sanction the banks hoarding cash. But we learnt that the banks always go to CBN to request cash, but they don’t get any”, he said.

Similarly, in his view, the President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions, Olusoji Oluwole, attributed the cash shortage to the CBN’s failure to meet commercial banks’ cash demands.

However, in a recent statement, the CBN blamed the cash scarcity on the rise in cash held outside bank vaults, which has risen by N1.59 trillion year-on-year to N4.29 trillion.

The bank said over 90 per cent of the currency in circulation has remained outside the formal financial institutions in 2024.

The data showed that by October, currency outside banks had reached N4.29 trillion, making up 94.3 per cent of the total N4.55 trillion in circulation.

This marks a notable year-on-year increase of 59 per cent or N1.59 trillion, rising from N2.70 trillion in October 2023, when 89.6 per cent of the total currency was outside banks.

On bank transfer charges, the financial expert said, “Nigerians are beginning to pay more taxes either directly or indirectly. Most of these charges don’t stay in the bank, they go to the federal government,” Mr Salami said.

ALSO READ: Tinubu’s tax reforms will alleviate burden on vulnerable Nigerians – Minister

On the effect of poverty on the consumption culture of northern Nigeria, Mr Salami described the situation as “poverty of the mind” and blamed the political leadership in the region for a lack of vision.

“What is in existence in the North is the poverty of the mind, most especially on the part of the leaders who are unable to look inward before now. During the time of Ahmadu Bello and Tafawa Balewa, the North was a predominantly productive region, but since then, things have gone haywire.

“There is a lack of vision of leadership in the North; all they care about is coming into the office and doing as they please without any plans for the people,” he said.