'Seun Ibukun-Oni, Abuja
DAILY COURIER - The Federal Government has expressed plans to overhaul Nigeria’s tax system, with an emphasis on discouraging the taxation of capital and poverty while focusing on investments.
This comes as the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oloyede, revealed that the current fiscal system has failed to deliver tangible results despite over 60 taxes and levies being collected nationwide.
Addressing the Senate during its plenary session on Wednesday, Oloyede criticized the country’s tax structure, claiming that the over 60 taxes imposed across the country have yielded no visible benefits for the citizens or businesses. He stressed that the existing fiscal system, rather than fostering growth, is stifling Nigeria’s economic potential.
"Nothing to show for over 60 taxes"
Oloyede’s remarks were aimed at highlighting the inefficiency of the current tax system, which he argued has failed to create meaningful economic benefits or contribute to public infrastructure. He told the Senate: “The fiscal system we have today inhibits growth. Over 60 taxes and levies are collected from across the country, but there is nothing to show for it.”
His statement aligns with concerns from business leaders and economists who argue that the multiplicity of taxes, without corresponding benefits, has burdened Nigerian businesses, especially those already struggling in a challenging economic climate.
Oloyede highlighted the urgent need for tax reforms, emphasizing the federal government’s desire to stop the practice of taxing businesses even when they are making losses. He stressed that this policy discourages investment and threatens the sustainability of businesses in the country.
“We do not want to tax capital or poverty but investment,” he stated, signaling a shift in focus toward policies that encourage and reward investment rather than penalize businesses for attempting to survive in an increasingly competitive global market.
This statement underscores the importance of attracting and retaining investment in Nigeria, particularly as many businesses are increasingly seeking more favorable tax regimes in other countries. Oloyede’s remarks resonate with growing concerns that Nigeria risks losing its tax base to other nations with more investor-friendly policies.
In his address, Oloyede warned that Nigeria was in danger of losing its tax base to other countries if drastic reforms are not introduced. “We are beginning to lose our tax base to other countries,” he said, stressing that without timely intervention, the Nigerian tax system could further alienate potential investors.
Oloyede's comments were in line with the broader government push to revitalize the economy and streamline tax collection. He highlighted that reforming the tax system is critical to expanding Nigeria's tax base, which is seen as a key source of revenue needed to fund the country’s development and address its fiscal deficits.
The discussion around tax reform was further intensified by the Senate’s Wednesday protest regarding the entry of the Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, and consultants who had come to explain the details of the proposed Tax Reform Bill. Before Adedeji and the consultants were allowed into the chamber, some lawmakers voiced their objections, leading to a brief uproar.
Despite the protest, the Senate suspended its rules to permit Adedeji and his team to enter and discuss the proposed tax reforms. However, after their explanations, the lawmakers refrained from asking further questions, instead opting to invite the team for additional clarifications during the next legislative session. This decision indicates a careful approach by the Senate, as they look to fully understand the implications of the proposed tax changes before taking any final resolution.
The call for tax reforms by Oloyede and the ongoing discussions in the Senate signal a potential shift in Nigeria’s fiscal policy. If successful, these reforms could modernize the tax system, making it more efficient, equitable, and business-friendly. The ultimate goal is to create a tax structure that encourages investment, boosts economic growth, and ensures that the revenue generated benefits the nation’s development.
As the Senate prepares to revisit the proposed reforms, the focus will likely remain on finding a balanced approach that ensures adequate revenue generation without discouraging investment or burdening businesses that are already struggling in a challenging economic environment. With the government’s emphasis on tax reform, there is hope that Nigeria can develop a more sustainable and growth-oriented fiscal system in the near future.
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