Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, revealed that Nigeria is losing approximately N20 trillion (about $26 billion) annually due to gaps within its tax system, including evasion and collection inefficiencies.
Oyedele made this disclosure during a press briefing alongside Mr. Zaccheus Adedeji, Special Adviser to the President on Revenue, Shubham Chaudhuri, World Bank Country Director in Nigeria, and Otunba Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN). The briefing took place after the committee’s inauguration by President Bola Tinubu at the State House, Abuja.
Oyedele expressed concern that tax evaders often escape with minimal or no consequences and emphasized the need for change. He mentioned that Nigerians are willing to pay taxes if they can see the benefits derived from them. The main goal of the committee is to streamline and harmonize taxes, reducing their multiplicity and ensuring a more efficient collection process.
He explained, “The mandate of the committee is to get rid of so many taxes that come in the way of prosperity for our people. So Nigerians should look forward to a more harmonized, fewer number of taxes.”
Oyedele further revealed that Nigeria’s current tax-to-GDP gap is estimated to be around N20 trillion. He mentioned that while there are inefficiencies in collecting the existing taxes, Nigeria needs to improve its tax-to-GDP ratio. He stressed that tax policies should prioritize investment and economic growth, focusing on taxing consumption rather than production.
Shubham Chaudhuri, World Bank Country Director, commended President Tinubu for eliminating fuel subsidies, which contributed significantly to government revenues. He underscored the importance of increasing Nigeria’s tax-to-GDP ratio to support essential services like healthcare, education, and infrastructure.
Chaudhuri highlighted the need for the Nigerian government to address tax evasion, examine tax expenditures, assess collection costs, and fine-tune the tax policy regime. He also emphasized redirecting funds to areas that genuinely benefit the country, such as human capital development and youth skills.
Otunba Francis Meshioye, President of MAN, emphasized the link between fiscal policy, taxation, and the well-being of the people. He stressed that businesses should pay fair taxes, and the government should utilize the revenue to enhance the business environment and improve citizens’ well-being.
Meshioye expressed optimism about the committee’s work, stating that President Tinubu’s address instilled hope that taxes would be fairly charged and used to enhance competitiveness and attract foreign investment.
In conclusion, the committee’s focus is on simplifying and harmonizing taxes, improving tax administration, and ensuring that tax revenues are effectively utilized for the betterment of the Nigerian economy and its citizens.