Oyedele urges urgent passage of tax reforms to address Nigerians’ struggles

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has stressed the urgency of passing the Tax Reforms Bills, stating that they are crucial to addressing the struggles faced by most Nigerians.

In an interview with Arise News on Wednesday, Oyedele responded to concerns raised by Borno State Governor, Professor Babagana Zulum, about the proposed bills before the National Assembly.

Zulum had claimed that the tax reforms were rushed and accompanied by misconceptions that required further consultation, particularly regarding the VAT allocation.

Oyedele rejected the notion of rushing the reforms and stressed that the urgency arises from the severe economic challenges Nigerians are facing, including high inflation and an overwhelming number of taxes on small businesses.

He noted, “The majority of our people are struggling and living in multi-dimensional poverty.”

The proposed tax reforms include a 60% derivation principle for VAT, which Oyedele argued would promote greater equity in revenue distribution and encourage economic activities across the country.

He further pointed out that the tax burden on businesses, with over 60 official levies and more than 200 unofficial taxes, is crippling many entrepreneurs.

He noted, “Our small businesses are burdened with over 60 official levies, taxes, and more than 200 unofficial ones. We are struggling just to help people feed themselves because inflation is escalating.

“We have people who don’t have decent jobs. That’s why the poverty rate is high, even though the unemployment rate is officially low. We are dealing with all these issues.

“If you want to provide relief for your people, you should do it quickly because it’s urgent. It’s an emergency. The way we should respond to these issues should be similar to how the world responded to COVID-19.”

Responding to Zulum’s call for more time to review the bills, Oyedele said that the process has been ongoing for over a year and that discussions with governors have already taken place. The bills are now under review in the National Assembly, and Oyedele urged for them to be finalised quickly to provide relief to the Nigerian people.

“There were countries where laws were passed within two days because it was an emergency. We are not even doing it in two days. We have been working on this for over a year,” he added.

He also acknowledged that while there has been pushback from some states, the goal of the reforms is to address existing inequities in the tax system.

“We hadn’t anticipated this pushback from other states,” Oyedele admitted, noting that the opposition had been stronger than expected.

The tax reforms include provisions for revising the VAT distribution formula, which currently allocates 50% to the states and FCT, and 35% to local governments, with 15% going to the federal government.

The new proposals are aimed at increasing fairness in the sharing of VAT revenues among the states.