Oyedele raises alarm over Nigeria’s 70% tax revenue gap

As Nigeria awaits the constitutional approvals to the new tax reform bills, Lagos State Governor, Babajide Sanwo-Olu, has called for sub-nationals’ commitment to modify state laws where necessary to enhance Nigeria’s overarching goal of attaining a $1 trillion economy.
  
However, the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, revealed that the country is collecting only 30 per cent of its potential tax revenue, leaving a staggering 70 per cent gap, one of the highest in the world.
  
Sanwo-Olu made this observation yesterday in Abuja at the opening ceremony of the 27th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) with the theme ‘Taxation for Development: Policies, Law, and Implementation’.
  
According to him, investment in data analytics, technological innovation and human capital development by sub-nationals is essential to the attainment of the ambitious economic goal.
  
Represented by his Special Adviser on Taxation and Revenue, Ogungbo Opeyemi, the governor stressed the need for sub-nationals not only to embrace the imminent tax law, but also to lead the implementation drive.
  
He stated: “As we await constitutional approvals to the new tax reform bills, and earnestly looking forward to their full implementation, to my colleagues (leadership of sub-nationals), the clauses that puts a cap on income of employees at N800,000 yearly, before it can be subjected to Personal Income Tax (PIT), requires deliberate strategies to ensure taxpayers hiding under the Micro, Small and Medium Enterprises (MSMEs) and start-up sectors are brought into the tax net and intensify effort on direct assessment drive for high net worth individuals to forestall tax evasion as witnessed across the country today.”
  
“It is imperative that, as sub-nationals, we not only embrace but also lead the implementation drive. A policy commitment by sub-nationals to deliberately modify state laws where necessary, investment in data analytics, technological innovation, and human capital development is essential.”
  
Sanwo-Olu expressed confidence that the discussions at the conference and other related fora would lay the groundwork for a stronger and more resilient tax culture, one that will drive sustainable economic progress and move the country towards a future of inclusive prosperity.

SPEAKING on ‘Taxation for Development: Policies, Law and Implementation’, at the conference, Oyedele highlighted the deep-rooted inefficiencies plaguing Nigeria’s tax system, citing policy loopholes, widespread abuse of waivers and incentives, and weak enforcement as major culprits.
  
He stressed that significant tax losses were being driven by the misuse of import waivers and duties. In his view, no one should benefit from tax deductions or allowances on imported goods without first paying the corresponding duties.
  
To address systemic leakages, Oyedele advocated the implementation of advanced tax technology capable of real-time monitoring. He gave examples of how intelligent systems could log inventories, track sales, and flag discrepancies.
  
These technologies, he said, can also uncover tax evasion through inconsistencies between declared income and extravagant lifestyles, such as frequent foreign travel or luxury acquisitions.
  
Oyedele lamented that while a minority manipulates the system for gain, millions of Nigerians were unjustly overburdened.He disclosed that some of the country’s largest companies, particularly in the oil and gas sector, had official tax rates as high as 85 per cent on paper, yet made no significant payments.