The Federal Government is working towards implementing a single-digit tax system to reduce the financial strain caused by multiple taxes on Nigerians, according to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms.
Speaking in an interview on Channels TV, Oyedele explained that once the ongoing tax reforms are completed, all taxes in the country will be streamlined to single-digit rates. This move aims to simplify the tax landscape and reduce the burden on businesses and individuals alike.
“A single-digit tax system means that Nigerians and businesses will only be required to pay fewer than 10 different taxes over a specified period,” Oyedele said. “Our goal is to make tax compliance easier and more predictable for everyone.”
The interview, themed ‘Tax Reforms: Why States Should Not Collect VAT’, also saw Oyedele emphasize the importance of cooperation between federal tax authorities and state governments. He highlighted efforts to improve data sharing, tax intelligence, and capacity building for local tax authorities.
“Our hope is that by the time the reforms are completed, all taxes will be reduced to single-digit rates,” Oyedele said, stressing that the reforms are designed to enhance the efficiency of tax collection while allowing local governments to focus on their core responsibilities.
The committee is also working on the Nigerian Tax Administration Bill, which aims to overhaul the registration of taxpayers, tax filing processes, tax assessments, audits, and the use of technology in tax administration. Oyedele indicated that the bill is being fine-tuned with input from legislators and should address the system’s longstanding challenges.
“The Nigerian tax system is among the most backward in the world, and it’s quite embarrassing,” Oyedele said. “As we approach 2024, delaying the reforms any further would be a missed opportunity. We must work together to ensure these bills are passed and the tax system is modernized.”
On his official X account, Oyedele reiterated that the federal government’s goal is to reduce the overall tax burden on Nigerians while still ensuring sufficient revenue generation for the country. He emphasized that the tax reforms would not increase taxes but rather simplify the process, harmonize taxes, and eliminate barriers to investment.
“Our plan is to reduce the tax burden, not increase it. By simplifying the tax system, harmonizing different levies, and addressing obstacles to business growth, the reforms will stimulate economic activity and ultimately increase revenue for all levels of government,” he explained.
Oyedele outlined several strategies to boost tax revenue without increasing the tax burden, including removing disincentives to business formalization, leveraging technology and data for better tax enforcement, and simplifying administrative processes. He also pointed out that tackling tax evasion would create a fairer environment for businesses, where compliant taxpayers are not penalized while evaders are held accountable.
Some of the key proposals under discussion include reducing the corporate income tax rate from 30% to 25% over the next two years and eliminating various earmarked taxes on companies. These would be replaced with a unified, lower tax levy.
The announcement follows increasing public concerns over the impact of multiple and rising taxes under President Tinubu’s administration.
