Tinubu’s govt tax reforms will double revenue in 3 years, says committee chair

Taiwo Oyedele, who leads the presidential committee on fiscal policy and tax reforms, has expressed confidence that the proposed updates to Nigeria’s tax laws will drive a substantial increase in revenue.

Speaking in an interview with Bloomberg, Oyedele detailed the anticipated impact of these reforms.

Earlier, on October 3, President Bola Tinubu presented four tax-related bills to the national assembly for consideration and approval. These include the Nigeria Tax Bill, the Tax Administration Bill, and the Joint Revenue Board Establishment Bill.

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Among the measures outlined in the proposed legislation is an increase in the value-added tax (VAT) rate to 10 percent by 2025, as well as a reduction in the company income tax (CIT) rate to 27.5 percent from its current average of 30 percent within the same timeframe.

The bill also proposes an increase in personal income tax (PIT) to 25 percent for high earners, up from around 20 percent, starting next year.

Additionally, President Tinubu seeks to dissolve the Federal Inland Revenue Service (FIRS) and establish a new agency called the Nigeria Revenue Service.

The Northern States Governors Forum (NSGF), after meeting with the Northern Traditional Rulers Council at Kaduna’s government house on October 28, voiced opposition to the proposed bills. The governors urged the national assembly to reject any legislation that could disadvantage the region, emphasizing the need for national policies to be fair and inclusive, ensuring that no geopolitical zone faces marginalization.

Following this response, the presidency assured the northern governors on October 31 that the reforms are designed to enhance the well-being of Nigerians without disadvantaging any particular area, aiming to strengthen the current tax framework.

On that same day, the National Executive Council (NEC) recommended that President Tinubu withdraw the bills to allow for further consultations. However, Tinubu encouraged the council to allow the legislative process to proceed.

Oyedele indicated that the reforms have the potential to increase revenue to double its current share of the gross domestic product (GDP) within two to three years.

“If we are moving from 9 percent to 18 percent, that means we are doubling it,” he said.

He added that while the government remains committed to the reforms, certain aspects may be adjusted if necessary.

“The worst case scenario is to drop the controversial issues,” he noted. “There’s an outcome of it going ahead as proposed, or the one that goes ahead with modification, which is okay.”

The federal government has also reassured that the tax reforms presently under consideration will not compromise the funding or operational efficiency of existing agencies.