The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has said that Nigeria’s revenue generation has not only fallen below global standards but even below African standards.
Oyedele, who said this in his speech on Tuesday, after the inauguration of the committee in Abuja, noted that despite the country’s revenue falling below African standard, it has one of the highest tax collection costs, the burden of which has been on the poor and vulnerable.
He further noted that many of Nigeria’s existing fiscal and tax laws are outdated, adding that though it could be said that Nigeria’s tax administration has improved, it remains relatively basic, with instances of unregulated collections by untrained officers, particularly at the local government level.
Oyedele stressed that public willingness to pay taxes in Nigeria is strained because of a lack of trust in government, both among individuals and businesses, irrespective of size.
According to him, the burden of tax falls heavily on those who comply, while those who evade tax payments often get away with little or no consequences.
He said, “The task before us is substantial yet pivotal. Our fiscal policies could benefit from better crafting grounded in data and evidence, ensuring coherence and consistency. We need enhanced alignment with the modern economy and better coordination with monetary and other policies.
“Many of our existing laws are outdated, hence they require comprehensive updates to achieve harmonisation and address multiplicity of taxes, remove the burden on the poor and vulnerable while addressing the concerns of all investors, big or small.
“Our tax administration has improved but remains relatively basic, with instances of unregulated collections by untrained officers, particularly at the Local Government level, being widespread.
“Our revenue generation falls below even African standards, yet our collection costs are among the highest. This is due not only to multiple taxes but also to numerous collection agencies and fragmented revenue reporting procedures.
“Public willingness to pay taxes is strained because of a lack of trust in government, both among individuals and businesses, irrespective of size. The burden of tax falls heavily on those who comply, while those who evade often get away with little or no consequences. We need to change this.
“The process of resolving tax disputes is protracted and costly, with inadequate mechanisms for many small businesses and vulnerable individuals to seek fair tax resolution, as professional services are often beyond their means.”
“These challenges further provide a platform for us to mobilize revenue without introducing new taxes, and we can respond swiftly to our most pressing needs including measures to ease the impact of rising prices (e.g. suspension of VAT on diesel), reduce pressure on the Naira (e.g. cease the payment of taxes and levies in foreign currencies), and amend the laws to encourage remote work opportunities and foster job growth in the digital economy, especially for our teeming youth,” he added.
According to Oyedele, “empirical data affirms that Nigerians are willing to fulfill their tax obligations when they see meaningful returns on their tax contributions”.
