Over 200 Unofficial Taxes Burden Nigerians – Oyedele Explains Urgency Of Tinubu’s Tax Reform

Over 200 Unofficial Taxes Burden Nigerians – Oyedele Explains Urgency Of Tinubu’s Tax ReformTaiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has emphasized the urgency of President Bola Tinubu’s proposed tax reforms, which aim to ease the burden on Nigerians facing an overwhelming tax regime. Oyedele stated that the proposed reforms are designed to address the pressing issues of inflation, business challenges, and economic hardships impacting Nigerians and businesses across the country.....KINDLY READ THE FULL STORY HERE▶

According to Oyedele, if the reforms are approved, they will provide significant relief by eliminating over 200 unofficial taxes that Nigerians currently pay. In an interview with Arise News on Wednesday, he assured that the proposals—currently before the National Assembly—are in the best interest of the people and essential for promoting fairness and improving Nigeria’s fiscal policy framework.

Despite ongoing controversy surrounding the tax bills, Oyedele emphasized that these reforms are critical for addressing Nigeria’s economic challenges. “We are at a stage today where the majority of people are struggling—small businesses face over 60 official levies and more than 200 unofficial ones,” he said. “If you want to provide relief for your people, you should do it in a hurry because it’s urgent; it’s an emergency.”

Oyedele also criticized the current Value Added Tax (VAT) allocation formula, which is based on 20% derivation, 50% equality of states, and 30% population. He explained that this formula is flawed and cited ongoing litigation by Lagos and Rivers States as evidence. “Most likely, if we get the judgment from the Supreme Court, it will say that states should administer VAT,” he said. “If a state administers VAT, then it becomes 100% derivation. Our proposal to increase derivation to 60% is a middle ground, but if we lose this, we could end up with 100% derivation, which could create significant challenges for businesses and economic growth.”

He further pointed out that the current VAT system attributes tax revenue to states based on where payments are made, rather than where consumption occurs. This system disproportionately benefits Lagos State, and the proposed reforms aim to rectify this by attributing VAT revenue to the place of consumption, ensuring a more equitable distribution across the country. “To promote equity and stimulate economic activity, the reform proposes attributing VAT to where consumption takes place and increasing the share of VAT revenue that states retain,” he said.

On the pushback from state governors, Oyedele explained that the reform team had made efforts to engage them, but time constraints in meetings often limited the opportunity for detailed discussions. “We understand that governors have a very busy schedule, so we spent more time with their finance commissioners and revenue service chairpersons,” he noted.

Oyedele also revealed that the federal government is making certain concessions in the reform process. One significant change is a reduction in the federal government’s share of VAT from 15% to 10%, with the remaining 5% being reallocated to the states. This adjustment will provide states with more revenue while ensuring efficient, centralized tax collection.

In addition, Oyedele emphasized that the reforms aim to eliminate multiple taxes and enable digital tax payments. “We want to outlaw cash payments of taxes and introduce digital options such as USSD, bank cards, and transfers. Third parties will only assist with technology implementation, not tax collection,” he said.

These tax reforms, according to Oyedele, are essential not only for relieving the burden on Nigerians but also for ensuring a fairer, more efficient fiscal system that can support the country’s economic growth.

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