Nigeria’s tax reforms committee proposes 8 taxes

Nigeria's Presidential Fiscal Policy and Tax Reforms Committee has recently proposed a major overhaul of the country's tax system, aiming to address the burden on citizens and the government's revenue shortfall. Led by Chairman Taiwo Oyedele, the committee advocates for the harmonisation of over 60 taxes and levies into just 8 across all levels of government. In a recent interview with CNBC Africa's Akin Obakeye, Oyedele highlighted the necessity of this harmonisation, emphasizing the need to simplify the tax system to ease the burden on the people and increase revenue collection for the government. One of the key points raised by Oyedele is the current issue of 'nuisance taxes' which impose a significant burden on the people without providing substantial revenue to the government. By consolidating these various taxes and levies into a streamlined system of 8 taxes, the committee aims to eliminate unnecessary financial strain on citizens while ensuring a more efficient revenue collection process. Another crucial aspect of the proposed reforms is the identification of a single, high-yielding tax that is easy to collect and minimizes financial burden on the populace. By focusing on taxes that yield higher returns without hampering economic activities such as transport and production, the committee believes that the new system can generate more revenue while promoting economic growth. Furthermore, the committee is pushing for a constitutional amendment to limit the total tax burden on individuals and businesses to a single-digit percentage. By setting a clear cap on the amount of taxes that can be levied on entities, the committee aims to provide greater financial stability and predictability for taxpayers, fostering a more conducive business environment. In terms of implementation, Oyedele highlighted the importance of engaging with stakeholders at all levels of government to ensure the successful adoption of the proposed reforms. By collaborating with various governmental bodies and regulatory authorities, the committee hopes to streamline the process and garner support for the new tax system. Notably, the committee's proposal also includes amendments to the withholding tax regulation, with businesses earning below 50 million Naira being exempted from this tax. This adjustment is expected to provide relief for small companies and encourage business growth by reducing the tax burden on emerging enterprises. Overall, the committee is optimistic about the prospects of implementing these tax reforms and is actively working towards gaining the necessary approvals and support from relevant stakeholders. With a focus on simplification, efficiency, and revenue generation, the proposed harmonisation of taxes in Nigeria could signal a significant step towards enhancing the country's fiscal policy and economic landscape.