Tax reformer Oyedele reiterates reduction of taxes to enable businesses thrive
By Jeph Ajobaju, Chief Copy Editor
Taiwo Oyedele, Presidential Fiscal Policy and Tax Reforms Committee Chairman, has reiterated plans to reduce the current number of taxes from about 62 to fewer than 10 to avoid multiple taxation and enable businesses thrive.
He made the point at the 53rd annual conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja, where he disclosed 62 taxes are officially collected across the three tiers of government which impose a heavy burden on citizens.
He also cited and decried several informal taxes being collected across the country.
“At the federal level, the list is somewhere close to 16 officially. At the state level 25, local government 21. But this is just the beginning of the story. The story is incomplete,” Oyedele stressed.
“Until you add the over 108 informal taxes collected all over the place, sometimes by non-state actors that have been empowered either passively or actively by the government.
“In fact, we have bicycle tax, and wheelbarrow tax in Nigeria.
“I think if you’re looking for the definition of wickedness, it will be to find a man who is struggling to make ends meet pushing their wheelbarrow in the sun and say, you have not paid your tax.
“What I want and hope to achieve is the reduction of the number of taxes to less than 10. Yes, we want a single digit, and we want to cut down revenue collection agencies to one for each tier of government.
“With this, the federal government has one revenue collection agency, the same for state and local governments – so that they can focus on their primary mandate of making life easier for citizens.”
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Tackling poverty
Oyedele highlighted a range of pressing issues Nigeria must tackle, such as poverty, meagre revenue, surging debt, diminishing investments, and youth emigration, per Nairametrics.
“We have widespread poverty, government’s revenue is low and as a consequence, public debt is high. And the debt service to revenue ratio is one of the highest we’ve seen anywhere in the world. Investment is declining and you cannot have economic growth without investments.
“Whether they are domestic or international, we’re not attracting foreign investment, and we’re not mobilising domestic investment enough. Many of the existing investors are leaving and those who are left are asking questions; can we continue?
“So, these are fundamental issues we must address; our people also leaving the country as a percentage of the population not too far.
“My view is that even if it’s only 1 per cent, to the extent that they are leaving because they feel frustrated, then we should be concerned.
“We need to know how much of what you collected from the people have you given back to them. And why give it back to them; it is important to note in what ways are you giving it back.
“For example, if you decide to build high rises, airports, and flyovers when the people lack drinking water, basic education, and there’s no road from the farm to the market, it’s the wrong priority and it is as good as the money being stolen, or the money being wasted.
“So, the problem is not with the tax itself. It is what you do with the taxes you have collected.”
Tax constitutes 90% of government revenue
Matthew Gbonjubola, Head of Special Tax Operations at the Federal Inland Revenue Service (FIRS), disclosed tax revenue consistently constitute around 90 per cent of government total income.
His words: “The current system being used by the Federal Revenue Service was developed in-house by officers of the service because we were able to design our processes by ourselves.
“Quite several new modules are currently in the works. For example, we have a new VAT [Value Added Tax] module that was unveiled some time ago again due to various interventions and inputs from stakeholders we have reviewed.
“Part of what is going to come, hopefully in a few months, again will boost the ability to make foreign payments directly on the FIRS portal and then you get your receipts to be generated for you.
“We are hoping that very soon we’ll be able to open the portal for you to change your profile, to do several maintenances by yourself and change your address; you can change your telephone numbers and things like that.
“We are coming to that, and we are also doing a lot with our sister government agencies as regards data.”
Gbonjubola added the FIRS has made public its current data-sharing efforts with several organisations, including the Central Bank of Nigeria (CBN) and the Financial Intelligence Unit (FIU), and has facilitated the tracking and reporting of the incomes of diaspora Nigerians.
