In order to lessen the burden of numerous taxing on individuals and enterprises, the government of President Bola Ahmed Tinubu is contemplating a major revamp of Nigeria’s tax system, which would include the introduction of a single-digit range tax structure.
When this strategy is fully executed, Nigerians will only be required to pay a small amount of taxes—all under 10. Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal and Tax Reforms, explained in a recent interview on Channels Television that the goal of the current tax reforms is to simplify the system by lowering all taxes to single digits.
The government’s larger plan to increase economic growth and expedite tax collection includes this measure.
Oyedele, during a discussion on ‘Tax Reforms: Why States Should Not Collect VAT,’ emphasized the need for improved collaboration between tax authorities and states, particularly in areas such as data sharing, tax intelligence, and capacity development. He stated, “Our hope is when we are done with our reforms, all the taxes will be down to single digits.”
The reform plan also includes measures to enhance tax administration, with a focus on using technology for efficient tax collection. Oyedele described the current Nigerian tax system as one of the most backward in the world, urging for swift reform processes to address the issue.
The government also aims to reduce the overall tax burden on Nigerians while ensuring adequate revenue generation. The reforms seek to harmonize taxes, eliminate business disincentives, and improve compliance.
Oyedele highlighted that small and large businesses would benefit from the introduction of a harmonized single levy at a reduced rate, including a proposed reduction of corporate income tax from 30% to 25% over the next two years.
The proposed reforms come in response to public dissatisfaction with the increasing tax burden under President Tinubu’s administration.
