The federal government intends to implement a single-digit tax system to lessen the burden many taxes have placed on Nigerians.
Under a single-digit tax system, individuals or corporations can pay less than ten taxes in a given period.
In an interview with Channels TV, Taiwo Oyedele, the head of the Presidential Committee on Fiscal and Tax Changes, stated that upon completing the current changes, all taxes would be reduced to single digits.
In an interview titled “Tax Reforms: Why states should not collect VAT,” he stated that his group has established a structure to improve collaboration between tax authorities and states in terms of data, tax intelligence, and capacity building.
“We hope that all taxes will be reduced to single digits once our reforms are complete,” Oyedele stated.
“While others concentrate on primary mandates, we want to be able to let the tax-trained authorities collect taxes and watch the economy grow in a way that benefits everyone,” Oyedele added.
“The Nigerian tax administration law is an attempt to incorporate taxpayer registration, return filing, assessment, tax auditing, and the use of technology in tax administration. We are engaging with legislators, and we believe Nigerian MPs have issues, therefore we want to summarise the bill for them,” Oyedele added.
He called the situation “embarrassing” and pointed out that Nigeria has one of the most archaic tax systems in the world.
“We are in 2024, and anything that will stop the reforms of Nigeria’s tax system will be sad and I think we can work out the differences for the process to continue and for the bills to be enacted.”
FG Aims For More Tax Revenue
On Monday, Oyedele also stated on his X account that the federal government will lessen Nigerians’ total tax burden while maintaining sufficient income generation in the nation.
In response to inquiries from the public regarding the Tinubu administration’s pending tax reforms, he clarified this.
He asserts that the administration wants to streamline the system by harmonizing taxes and guaranteeing sufficient funds to strengthen the economy.
“The goal is to lower, not raise, the overall tax burden. The reforms will increase economic activity and, consequently, revenue collection for all levels of government by streamlining the tax structure, harmonizing levies, and removing barriers to investment,” Oyedele stated.
He listed the government’s measures to guarantee that tax income rises without increasing the tax burden. These tactics include tax simplification, the use of technology, data for intelligence, and eliminating obstacles to company formalization.
“This will guarantee that we can increase tax revenue without increasing the tax burden using a number of tactics, such as eliminating barriers to business formalization, using data and technology for intelligence, simplifying taxes, and improving administrative capabilities. Beyond boosting income, combating tax evasion provides a level playing field for everybody, rather than tacitly penalizing compliant taxpayers and rewarding evaders”, he stated.
He pointed out that the government’s measures will help both small and large firms because there will be a unified single levy at a lower rate.
“Some of the proposals include reduction of corporate income tax rate from 30 percent to 25 percent over the next 2 years and elimination of earmarked taxes on companies to be replaced with a harmonized single levy at a reduced rate,” he concluded.
