Nigeria’s tax system is not conducive to economic growth due to multiple taxes and taxing agencies, says Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform.
Speaking at a finance conference in Abuja, he urged the government to focus on expanding the tax base rather than increasing rates or taxing capital.
Oyedele projected that Nigeria could achieve single-digit inflation by the end of 2025, citing positive economic indicators such as an improved trade balance, declining budget deficits, rising revenues, and better forex inflows.
He emphasized the need for tax reforms to reduce business risks, lower tax burdens, and eliminate multiple taxation.
Proposed reforms include tax relief for households, incentives for small businesses, and a more competitive tax regime.
He also called for budgetary reforms, improved public financial management, and increased citizen participation to ensure sustainable economic growth.
Oyedele identified tax reform as a pillar of Nigeria’s economic prosperity, noting that the prevailing tax system stifles growth.
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He observed that the current tax regime is unhelpful to businesses, households, and even the government, with the situation worsened by the multiplicity of tax-collecting agencies.
Amidst the chaotic tax system, he advised the government to expand the economic base to increase tax revenue rather than raising tax rates or taxing capital.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reform also urged the government to prioritize the welfare of the people and the success of businesses before focusing on revenue generation.
Oyedele reiterated that Nigeria could achieve a single-digit inflation rate before the end of 2025, given the emergence of several positive economic indicators.
He identified these indicators as a balance of trade/current account surplus, slowing inflation in developed markets, declining budget deficits at the federal and state levels, rising revenues, increased capital expenditure, and repayment of Ways & Means financing.
Other favorable indicators include rising crude oil and gas prices and production volumes, the commencement of local crude oil refining, positive outlooks from rating agencies, strong capital market performance, and improved forex inflows from foreign portfolio investments and remittances.
Speaking at the 2025 Finance Correspondents/Business Editors’ Annual General Meeting (AGM) and Conference in Abuja over the weekend, Oyedele noted that Nigeria’s economy is still a work in progress, currently characterized by high inflation and a high cost of doing business.
He also highlighted other key economic issues, including exchange rate convergence and stability, rising poverty, declining opportunities for decent jobs, a high-interest rate environment, insecurity challenges, social tensions, and the need for efficient public financial management, policy coordination, and public communication.
Oyedele called for the optimization of all revenue sources, noting that personal income tax contributes less than 10 percent of total tax revenue in Nigeria, compared to the global average of 30 percent.
He stressed the urgency of addressing multiple taxation and the multiplicity of taxing agencies, adding, “We need budgetary reforms, robust accountability, and transparency.”
Oyedele emphasized that citizen participation is critical and that reforms must be people-centric. He stated, “Nigeria’s tax system is unconducive to growth due to the multiplicity of taxes and taxing agencies, as well as the high corporate tax burden on businesses.”
He advocated for the elimination of taxes on poverty, capital, and investments and the phasing out of archaic laws and ambiguous tax provisions.
The proposed tax reforms, according to Oyedele, would reduce business risks, eliminate minimum tax, interest deduction, tax rulings, and the statute of limitations.
Additionally, the reforms would lower tax burdens, reduce tax rates, facilitate tax payments in naira, and ensure tax refunds.
He added that the reforms would introduce a more competitive tax regime, input VAT credits, tax reliefs, economic development incentives, and an improved regime for reorganization and research & development (R&D).
The impact of the proposed tax reforms on households, according to Oyedele, includes economic relief measures such as wage awards, transport subsidies, tax waivers on food imports, tax suspensions on fuel products, and lower tax burdens. These reforms would exempt low-income earners, reduce tax rates for the middle class, and introduce VAT zero-rating and exemptions.
He outlined new opportunities that the reforms would bring, including a “small business regime and start-ups, remote jobs, and investment income taxation.”
Regarding the impact on the government, Oyedele stated that the reforms would contribute to “macroeconomic stability, economic growth, revenue mobilization, a healthy fiscal balance, an improved tax-to-GDP ratio, enhanced credit ratings, and lower debt costs.”
He concluded that the reforms would address distortions in the incentives regime, improve free zones, and promote equity and fairness between the government and taxpayers.
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