Taiwo Oyedele admits errors in new tax laws

Minister of State for Finance, Taiwo Oyedele, has admitted that errors occurred in Nigeria’s new tax laws, while assuring that enforcement will not be arbitrary.

Speaking during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice, themed: “From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms,” Oyedele said the reforms are guided by clear policy intent, transparency, and fairness.

He stressed the need for professionals to understand the rationale behind tax laws, noting that policy intent should guide both interpretation and implementation rather than a narrow focus on provisions.

Oyedele pointed to inconsistencies in the previous tax regime, especially the imbalance between personal and corporate tax burdens, which he said discouraged business formalisation.

“Under the old system, an individual could pay an effective tax rate of about 19 per cent, but registering the same business as a company pushed the burden above 40 per cent. This was the opposite of global best practice,” he said.

He explained that the reforms were designed to encourage businesses to formalise, ensure policy consistency and reduce discretion in tax administration.

Reflecting on past challenges, Oyedele cited policy inconsistencies that discouraged foreign investment, including sudden proposals to raise taxes on gas companies.

“If policies can change overnight, it sends the wrong signal to investors. Consistency is critical,” he noted.

On inclusivity, he said the new framework protects low-income earners and small businesses, revealing that individuals earning about ₦1 million annually and millions of small businesses lack the capacity to pay taxes and are shielded under the reforms.

“Nearly half of working Nigerians earn less than ₦70,000 monthly. Taxing them aggressively would be unjust,” he said.

Oyedele added that the reforms removed practices such as minimum tax on loss-making businesses, describing it as taxing capital rather than profit, while exempting essential goods and services like food, education, and healthcare from Value Added Tax.

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He further said multiple tax laws have been consolidated into four major legislations, including the Nigeria Tax Act and the Nigeria Tax Administration Act, to simplify compliance and improve coordination.

Addressing concerns about discrepancies in the law-making process, Oyedele admitted that errors emerged due to manual processes and multiple review stages, adding that steps are being taken to correct them through a proposed finance bill.

“What we need is a more transparent and reliable legislative process where every version of a law is publicly available,” he stated.

He also highlighted the role of legal practitioners in shaping economic outcomes through tax advisory and compliance.

“The decisions lawyers help businesses make will determine investment, job creation, and revenue generation,” he said.

While noting improvements in revenue utilisation, Oyedele called for greater efficiency, adding that Nigeria still trails countries like South Africa in tax collection.

“If we improve collection, we can significantly increase funding for infrastructure, education, and healthcare,” he added.

He urged lawyers to prioritise effective implementation, stressing that the success of the reforms depends on how well they are applied.