No plan to impose higher tax rates – Oyedele

Taiwo Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, on Sunday, said the committee does not intend to introduce new taxes or impose higher tax rates on Nigerians.

Mr Oyedele disclosed this via his X handle on Sunday.

While responding to the frequently asked questions about the committee, he said the committee is making progress with its work and is on track to meet its deliverables on time according to plan.

Earlier in July, Mr Tinubu approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms and appointed Taiwo Oyedele as the chairman of the committee.

The government said the establishment of the committee reflects Mr Tinubu’s commitment to addressing challenges and bringing about transformative reforms in fiscal policy and taxation.

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The committee’s primary objective, according to the Nigerian government, is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilisation of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.

Responding to the question on the expectation of more taxes and frequent changes to the tax laws, Mr Oyedele said there is no plan to increase taxes. Rather, he said, the committee would help harmonise revenue collection to reduce the tax burden.

“We do not intend to introduce new taxes or impose higher tax rates. Rather, our mandate is to reduce the number of taxes and levies while harmonising revenue collection to reduce the burden on the people and businesses.

“The objective is to avoid taxing investment, capital, production or poverty. We plan to review and re-enact the major tax laws in a holistic manner thereby limiting the necessity for frequent changes through annual finance acts,” Mr Oyedele said.

He explained that the committee was set up by President Bola Tinubu to review and redesign Nigeria’s fiscal system with respect to revenue mobilisation, both tax and non-tax quality of government spending and sustainable debt management.

In addition, he said the committee will identify relevant measures to make Nigeria an attractive destination for investment and facilitate inclusive economic growth.

According to him, the work of the committee is expected to be completed within one year divided into three milestones.

Firstly, quick wins within 30 days focusing on urgent interventions to cushion the effect of current socio-economic challenges.

“Critical Reforms within 6 months including measures to address the multiplicity of taxes, simplify the tax laws, ensure policy coordination, drive accountability and transparent reporting and Implementation of structural revenue reform measures and critical fiscal policy changes,” he added.

He said the committee will work with all levels of government as critical stakeholders to ensure effective collaboration in the design and implementation of necessary fiscal policy changes and localisation of reforms at the subnational level as may be applicable.

He noted that members of the committee are drawn from a diverse pool of eminently qualified Nigerians across all geopolitical zones, age brackets, religion, and gender.

“They represent the private sector including trade associations, small businesses, civil society, and professional bodies as well as public sector institutions at federal, state and local government levels.

“The committee will open channels of communication and platforms for submission of inputs by the end of September 2023.

“In addition, we have outlined various stakeholder engagement sessions with Nigerians from all walks of life including people living with disabilities, artisans, Nigerians in the diaspora, multinational companies, the international investment community and so on. Everyone who has something to say will be heard,” he said.

Mr Oyedele said the average tax to gross domestic product (GDP) ratio for Africa excluding Nigeria is about 18 per cent.

“This is the basis for the target of 18 per cent and the estimated tax gap of N20 trillion.

“There is a huge opportunity to generate revenue by leveraging technology and tax intelligence to close the tax gap.

“In addition, we will rationalize incentives, reduce the cost of collection, and optimize revenue from government assets and natural resources. This way we can generate more revenue without introducing new taxes,” he said.