The federal government is considering recruiting new tax collectors or providing training for existing collectors to adopt a more civil approach.
This initiative is part of Nigeria’s efforts to reform its tax system, aiming to generate revenue for the implementation of a N23 trillion budget.
In a tweet on Wednesday, Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized the need to streamline multiple taxes within the informal sector and address unconventional methods of tax collection.
Oyedele mentioned two options: recommending the recruitment and training of new personnel for compliance or focusing on training existing collectors to adopt a more courteous approach.
While the former might face potential backlash, the latter is seen as a more sustainable solution, preventing social crises and providing relief to small businesses.
The goal is to find a win-win outcome for all stakeholders rather than alienating any particular group.
The decision is driven by the prevalence of illegal taxes and levies that have negatively impacted businesses in the informal sector.
Oyedele highlighted that Nigeria currently has over 60 taxes, levies, and charges across the three levels of government, with state and local governments administering 46 of them.
Some examples of these taxes include road taxes, motor park levies, truck fees, and charges for canoes, wheelbarrows, and carts.
The chairman emphasized that there are additional unauthorized taxes disproportionately affecting small businesses such as petty traders, hawkers, artisans, truckers, cart pushers, and okada riders.
The associated costs are often passed on to consumers, primarily low-income earners. Moreover, taxpayers have to deal with unorthodox collection methods and harassment from untrained revenue collectors on highways, markets, and streets, with little evidence of the benefits of the revenues collected.
To address these challenges, the tax reform team has proposed the repeal of burdensome taxes, the harmonization of justifiable ones, and the digitization of the collection process.
This includes utilizing multiple channels, including USSD, to enhance efficiency, reduce leakages, and promote accountability.
The overarching goal is to create a fairer and more transparent tax system that benefits both the government and the citizens.
