Plans have been made by the Nigerian federal government to reduce the number of taxes from 62 to 10. It is the focus and aim of the president to enhance the tax revenue of the country’s current gross domestic product (GDP) to 18 percent within a three-year period from the current 11 percent. The tax revenue of Nigeria as a share of GDP was estimated as a third of the average of 34 percent, designed for members of the Organization for Economic Co-operation and Development.
The Presidential Committee on Fiscal Policy and Tax Reforms and the Nigerian federal government made the announcement of their plan on the reduction of the current number of taxes. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made it known at a presentation at the 53rd annual conference of the Institute of Chartered Accountants of Nigeria in Abuja.
Over 108 informal taxes are collected all over the country.
Oyedele affirmed that the current 62 taxes made mandatory at different government sectors had significantly weighed down Nigerian taxpayers and businesses. Hence, the plans to decrease the numbers of taxes was majorly to alleviate the burden of tax payments and simplify tax system. In addition, he expressed his worry concerning the several informal taxes being generated within the country. He said that, according to data, the list of taxes differ according to the tiers of government.
At the federal level, the list was around 16 officially; at the state level, there is a record of 25; and at the Local Government level, there is an official record of 21. However, the list was said to be a starting ground. This is because more than 108 informal taxes are collected all over the country, and is sometimes collected by non-state actors that are empowered actively by the government or passively by the government. He added that he hoped to see a reduction, during his tenure, of the data of taxes to the barest number of less than 10.
Public debt was high due to low revenue of the government.
According to his statement, he highlighted that the aim of the plan was to beat down revenue collection agencies, with an initiation of a single digit, making each tier of government to have one agency. Furthermore, it was reported that there were some critical difficulties that Nigeria must quickly address. Some of the challenges he mentioned are the rising trend of youth emigration out of the country, dwindling investments, escalating debt levels, limited revenue and poverty. He added that public debt was high due to widespread poverty and particularly, the low revenue of the government.
Moreover, Oyedele stated that the debt service to revenue ratio is considered as one of the highest across the globe. Nevertheless, there have been setbacks due to decline in investment which has now jeopardized economic growth. He announced that President Bola Ahmed Tinubu has taken interest in enhancing the tax revenue of the country. This will boost it from the gross domestic product (GDP) of the rate of 11 percent to 18 percent, within a three-year period. Several measures have to be in place in order to ensure achievement of this ambitious goal.
Less than 250,000 among the 4M registered firms actively pay tax.
Taiwo Oyedele said that, according to the plan, the new tax project is to protect the poor on what they can pay and make the rich pay what is fair. He said that the tax revenue in Nigeria, as a part of the GDP, is known to be at the rate of a third of the 34 percent for members of the Organisation for Economic Co-operation and Development. Also, less than 250,000 among the 4 million registered firms in the country actively pay tax, while, less than a quarter of 41 million registered Nigerians pay their income tax. In company income tax (CIT) in 2022, the Nigerian federal government received N2.83 trillion ($6.175 billion).
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Nigerian taxes to be reduced from 62 to 10. – There will be an improvement of tax revenue from 11% to 18% in 3 years. – Express your point of view.
Taxes in Nigeria will drop from 62 to 10It is necessary for us to pay taxes. It is a responsibility we have as citizens. However, it makes sense that the government is attempting to lower the tax given the difficulty we are all currently experiencing. It is good move by the federal government
That’s fantastic! Reducing taxes from 62% to 10% in Nigeria will have a significant positive impact on businesses and individuals. It will stimulate economic growth, encourage investment, and attract more businesses to the country. With lower tax rates, businesses will have more capital to invest in expansion, innovation, and job creation. This, in turn, will lead to increased employment opportunities and improved living standards for the people of Nigeria.
Moreover, the projected improvement in tax revenue from 11% to 18% in just three years is highly promising. It indicates that the tax reforms will not only benefit taxpayers but also contribute to the overall development of the nation. The increased revenue can be utilized to fund essential public services, infrastructure projects, and social welfare programs, improving the quality of life for all Nigerians.
However, it’s important to ensure that the tax reduction is balanced with the need for sustainable government revenue. The government should closely monitor the impact of these tax reforms and make necessary adjustments to maintain a stable fiscal environment. It’s also crucial to promote transparency and accountability in tax collection and utilization to build trust and confidence among taxpayers.
Overall, I believe that these proposed tax reforms in Nigeria have the potential to unleash economic growth, attract investments, and improve the overall well-being of the Nigerian people. It’s an exciting development that holds promise for a brighter future for the country.
Nigerian taxes to be reduced from 62 to 10. Reducing taxes is a smart way to alleviate the hardships that residents are experiencing during a time when expansion is rampant and the country’s economy is struggling.