Taiwo Oyedele, the Chairman of Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee, believes Nigeria can significantly boost its Revenue without imposing new taxes. Instead, he advocates for better Tax Administration and the use of Technology to close the estimated ₦20 trillion gap. In an interview on Channels Television’s “Politics Today” on Friday, Oyedele emphasized that the committee’s work focuses on transformative fiscal reforms driven by evidence and wide consultation. “We’ve done a lot of work, quite extensive and far-reaching,” he said. “We have consulted widely, including with governors, federal revenue services, and primary sector stakeholders.”
The Presidential Committee on Fiscal and Tax Reforms was established to review and reform Nigeria’s fiscal and tax policies, aiming to enhance efficiency, increase revenue, promote economic growth, and reduce poverty. The committee’s objectives include reviewing Taxation laws, identifying new revenue sources, developing a national fiscal policy, harmonizing tax policies, improving tax administration, enhancing transparency, promoting economic diversification, and encouraging Private Sector investment. The committee’s work is expected to lead to a more effective fiscal and tax system, improving the overall well-being of Nigerians.
Oyedele expressed optimism regarding the possibility of this reform.
Regarding the pace of fiscal reforms compared to monetary policy, Oyedele explained, “Fiscal reform cannot be as rapid as monetary policy. It requires evidence-driven policies and extensive consultation to ensure accurate diagnosis and effective prescriptions.” He further disclosed that some recommendations, including a new taxation regime offering relief to small businesses and easing capital constraints, have already been implemented. These measures, signed by the Ministers of Finance and Economy, Wale Edun, are designed to stimulate growth amid current economic challenges.
When asked about generating more revenue without increasing taxes, Oyedele expressed optimism. “We have over 60 different taxes and levies but haven’t collected enough to adequately fund Infrastructure like roads,” he noted. “Instead of introducing new taxes, we advocate consolidating and harmonizing existing ones.” Oyedele stressed the importance of leveraging data intelligence and technology to close gaps in taxation and ensure compliance. “By identifying those who should be paying but aren’t, we can potentially double our revenue within two to three years,” he asserted.
Strategies to double revenue without heavy taxes.
He also emphasized the need for exemptions for micro-businesses and low-income earners to prevent burdening society’s most vulnerable. Oyedele affirmed his confidence in Nigeria’s ability to mobilize revenue sustainably. “We believe in our approach over the medium to long term. By streamlining taxes and enhancing compliance through modern methods, Nigeria can unlock its economic potential without overburdening its citizens,” he said. To achieve the ambitious goal of doubling Nigeria’s revenue without increasing tax rates, several strategies can be implemented. One is enhancing tax administration. Streamlining and improving the efficiency of collection processes is crucial. This involves training tax officials, reducing bureaucratic bottlenecks, and ensuring transparency in tax administration. Enhanced administration can significantly reduce leakages and increase the tax net.
Deploying advanced technologies such as data analytics, artificial intelligence, and Blockchain can help identify tax evaders, track financial transactions, and improve overall compliance. By integrating technology into the taxation system, Nigeria can enhance accuracy and reduce evasion. Then, instead of introducing new taxes, broadening the existing taxation base can generate more revenue. This includes bringing the informal sector into the system and ensuring that all eligible entities pay their fair share of taxes. Simplified registration processes and incentives for formalization can encourage compliance. Educating citizens and businesses about the importance of compliance and the benefits of paying taxes can also promote a Culture of voluntary compliance. Public awareness campaigns can highlight how levy revenues are utilized for public goods and services, thereby building trust in the system.
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Further, consolidating and harmonizing various levies can reduce the administrative burden on businesses and improve compliance. A unified tax policy that simplifies the structure can make it easier for taxpayers to understand and fulfill their obligations. There must also be effective enforcement mechanisms, including penalties for non-compliance and robust legal frameworks, that can deter evasion. Strengthening the judicial process to swiftly handle tax-related disputes can also enhance compliance. Finally, creating a conducive environment for private sector Investment through favourable policies can stimulate economic growth. Incentives such as tax holidays, investment allowances, and reduced corporate rates for specific sectors can attract investment and generate revenue.