Nigeria’s Tax System Under Scrutiny: Over 60 Levies Yielding Little, Says Oyedele

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has raised alarm over the inefficiency of Nigeria’s tax system, alleging that despite the collection of over 60 taxes and levies across the country, there is little to show for the funds.

Oyedele made the bold claim during a Senate plenary session on Wednesday, arguing that the current fiscal structure is stifling economic growth rather than fostering it.

“The fiscal system we have today inhibits growth as more than 60 taxes and levies are collected from across the country but nothing to show for it,” he stated.

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According to Oyedele, the federal government has failed to properly utilize the vast sums collected from businesses and individuals across various sectors, contributing to a lack of tangible development.

He also emphasized the plight of Nigerian businesses, many of which are burdened with taxes despite suffering financial losses.

He stressed that it is time to overhaul the system and reform the country’s tax policies to avoid further losses.

“We do not want to tax capital or poverty but investment. We are beginning to lose our tax base to other countries. This is why it is urgent to reform the tax system.” He said.

His comments follow ongoing tensions surrounding the Federal Government’s proposed Tax Reform Bill, which has stirred significant controversy since it was sent to the National Assembly earlier this year.

Oyedele, a key advocate of the bill, defended the proposal, which includes adjustments to Nigeria’s Value Added Tax (VAT) distribution system and seeks to streamline the country’s tax collection practices.

However, the bill has not been without opposition. Governors from the 19 northern states have strongly rejected the bill, particularly the suggestion of a derivation-based VAT distribution model, which they argue could disadvantage them.

The National Economic Council (NEC) also expressed reservations, calling for the bill’s withdrawal, although President Bola Tinubu has stood by its introduction.

In a statement made after the Senate session, President Tinubu reiterated that the bill aims to create a fairer system that benefits all states, not just the southern regions.

“While urging the NEC to allow the process to take its full course, President Tinubu welcomes further consultations and engagement with key stakeholders to address any reservations about the bills,” a presidential spokesman said.

The tax reform bill, which aims to align with broader financial reforms to improve tax compliance and economic efficiency, has seen mixed reactions.

Despite the concerns raised by some state governors and lawmakers, President Tinubu has insisted that the bill will proceed through the legislative process, arguing that it is crucial for boosting investment and fostering growth in the country.