Presidential Committee on Tax Reforms and Fiscal Policy has announced that it has recommended streamlining of taxes in the country to single-digit.
The committee’s Chairman, Mr. Taiwo Oyedele who briefed newsmen after submitting the report titled ‘Quick Win Report’ to President Bola Ahmed Tinubu on Tuesday, October 24, said they needed to prune the total number of Nigeria’s over 260 official and unofficial taxes to reduce the pains that businesses and individual payers are subjected to.
Oyedele noted that out of the 260 taxes paid by businesses and individuals, only 60 are official. The committee chairman who was in company with the Acting Chairman of the Federal Inland Revenue Service(FIRS), Zacch Adedeji, added that the committee was working to ensure that the 60 were reduced to a single digit.
He said; “We have seen countries like South Africa generating more than our entire national tax revenue from just one tax.”
Oyedele who revealed that they’ve commenced the process of rewriting the nation’s tax laws in order to birth a standard and more effective tax administration, further revealed that the task of restructuring the tax system would not be achievable through the courts but by assembling stakeholders for deliberations and approaching the National Assembly.
He added; “All we did today(yesterday) was to formally present the report to Mr President, but I will say that once we get the nod of Mr President, it will be like just switching on the tap and then the implementation starts immediately.
” There’s so much work for us to do, this is just Milestone #1, it is what we call the quick wins. The second phase, which is where we are now, is the critical reforms. Those critical reforms involve even rewriting our major tax laws, addressing something that everybody in this room will be very much familiar with; a multiplicity of taxis.
” We have over 60 taxes and levies, officially collectable by the Federal Government, state governments and local governments. Unofficially, those taxes are over 200, making life difficult for our people. So, the objective we have, and that’s what we’re working towards, is to bring all of that to a single digit.
“So, the taxes at all levels of government combined, we think should be less than 10 because actually about 96 percent, actually more than that, of our revenue across federal, states, local governments, currently is generated from less than 10 taxes.
“There is no evidence to show, in fact, the contrary is true that the more the number of taxes you have, actually the less revenue you collect because it just creates the opportunity for leakages and some non-state actors collecting money and keeping it to themselves.
“We were speaking to traders, MATAN (Market Traders Association of Nigeria) and they said to us, that people selling pure water in the market collect seven tickets every single day. Why should someone who is hawking pure water to keep body and soul together pay seven taxes on a daily basis? It doesn’t make sense to us.
” We are at that phase of rewriting our laws. We spent time with the Senate and we would also do the same thing with the House of Representatives, the whole idea is we think that some of the reforms we need to introduce have to go to the Constitution itself, there lack is of clarity about taxing rights between levels of government.
“We’re all familiar with the dispute around VAT (Value Added Tax). We think that the solution will not come from the courts, it will come from Nigerians coming together to say ‘Actually, this is the best way to deal with these matters.’
“We have commenced our public consultation and stakeholder engagement, it’s open until the 15th of November. I’m glad to inform you that after just a few days of opening up that platform for engagement, we have received inputs from every single state in Nigeria and we’re just starting.”
The FIRS boss Adedeji also pledged to ensure the implementation of the recommendations of the committee once approved by FEC. Adedeji said asides from supporting the fiscal and tax reforms, the FIRS will explore opportunities to diversify the nation’s revenue sources, as the historical overreliance on oil has made the economy vulnerable.
