Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has said Nigeria’s ongoing tax reform agenda is more crucial to the country’s economic future than the removal of fuel subsidy announced by President Bola Tinubu at his inauguration.
Oyedele made the statement on Thursday in Lagos during a stakeholders’ engagement with the Manufacturers Association of Nigeria (MAN), themed “From Legislative Assembly to Factory Floor: What the New Tax Laws Mean for Nigerian Manufacturers.”
He said that while President Tinubu’s declaration that “subsidy is gone” on May 29, 2023, has dominated public discourse, another key aspect of the inaugural speech ,the commitment to tackle multiple taxation has received far less attention despite its greater long-term significance.
“Everybody remembers that on day one, May 29, 2023, the President said ‘subsidy is gone,’” Oyedele said. “In that same speech, he said we must tackle the problem of multiplicity of taxation. Many people may not remember that, but it is even more important than the ‘subsidy is gone’ statement.”
He explained that the Presidential Committee on Fiscal Policy and Tax Reforms was established to actualise that vision, noting that Nigeria’s tax system had become counterproductive and hostile to investment.
According to Oyedele, the country imposes one of the highest tax burdens on corporate profits globally, with manufacturers bearing a disproportionately high effective tax rate.
“We were taxing investments,” he said. “Ironically, the manufacturing sector suffers more because of logistics inputs and outputs that cut across multiple jurisdictions.”
He added that manufacturers are confronted with a complex web of legal and illegal taxes imposed by both state and non-state actors, stressing that even lawful taxes are often collected in unlawful ways.
“This system was not working for us, and it was never going to work,” he said.
Oyedele also criticised the tax structure for disproportionately burdening low-income earners, describing it as a system that “taxes poverty.”
He recalled that the Voluntary Assets and Income Declaration Scheme (VAIDS) introduced in 2017 revealed that about 96 per cent of income tax revenue in Nigeria came from low-income earners, a situation he described as inequitable.
“That is not fair, and we needed to change it,” he said, adding that the new tax reforms are aimed at promoting fairness, reducing the burden on productive sectors, encouraging investment, and driving sustainable economic growth.
In his remarks, Director-General of the Manufacturers Association of Nigeria, Mr. Segun Ajayi-Kadir, said manufacturers’ interests were adequately represented in the formulation of the new tax laws.
He urged manufacturers to study the reforms closely and leverage the opportunities they provide, noting that the engagement was designed to bridge the gap between policy formulation and implementation in the real sector.