President Bola Ahmed Tinubu’s government is considering a single-digit range tax system to lessen the impact of multiple taxation on the Nigerian population.
In a recent interview on Channels Television, the Chairman of the Presidential Committee on Fiscal and Tax Reforms, Taiwo Oyedele, clarified that all taxes would be reduced to single-digit figures once the current reforms are completed.
The single-digit tax system would mean that citizens or businesses would only have to pay less than ten taxes over a certain period.
Oyedele mentioned this during an interview focused on the topic, ‘Tax Reforms: Why states should not collect VAT,’ highlighting that his committee has established a structure to improve collaboration between tax authorities and states in areas such as data sharing, tax intelligence, and capacity development.
“Our hope is when we are done with our reforms, all the taxes will be down to single digit.
“We want to be able to let the authorities trained on tax matters collect taxes while others focus on primary mandates and watch the economy grow in a way that benefits everyone,” Oyedele stated.
He added: “The Nigerian tax administration bill is our term to try and put registration of taxpayers, filing of returns, assessment, doing tax audit, and using technology for tax administration. We are engaging with legislators and we believe that Nigerian lawmakers have concerns and we want to summarise the bill for them.”
Oyedele noted that the Nigerian tax system is one of the most backwards in the world, describing the situation as ‘embarrassing.’
“We are in 2024, and anything that will stop the reforms of Nigeria’s tax system will be really sad and I think we can work out the differences for the process to continue and for the bills to be enacted,” he said.
Also, in a post via his official X handle, Oyedele explained that the federal government will reduce the overall tax burden on Nigerians while ensuring that enough revenue is generated in the country.
“The plan is to reduce the overall tax burden, not increase it. By simplifying the tax system, harmonising taxes and addressing impediments to investments, the reforms will boost economic activities and therefore enhance revenue generation for all tiers of government,” he noted.
He detailed plans the government plans to put into action to guarantee that tax income rises without elevating the tax load.
According to him, these plans include eliminating obstacles that discourage businesses from becoming formal, leveraging technology, utilizing data for insights, and simplifying the tax system.
“This will ensure that we can raise tax revenue without raising tax burden through various strategies, including removal of disincentives to business formalisation, use of technology and data for intelligence, tax simplification and enhanced administrative capacity. Beyond raising revenue, curbing tax evasion also ensures that there is a level playing field for all rather than implicitly penalizing compliant taxpayers and rewarding evaders,” Oyedele said.
He noted that the government reforms will benefit small and large businesses as there will be a harmonized single levy at a reduced rate.
“Some of the proposals include reduction of the corporate income tax rate from 30 per cent to 25 per cent over the next 2 years and elimination of earmarked taxes on companies to be replaced with a harmonized single levy at a reduced rate,” he said.
The development follows public outcries over multiple and increasing taxation by President Tinubu’s administration.
