Economy
Nigeria’s current tax system outdated, shameful — Oyedele
The Chairman of Tax Reform Committee, Taiwo Oyedele said, Nigeria’s current tax system is one of the most outdated, shameful and embarrassing, hence, Nigerians and critics of the proposed tax reform before the National Assembly to support it in order to bring the nation out of tax doldrums.
Speaking on Channels Live Television over the weekend, Oyedele criticised the system, which still operates under a 1939 stamp duty law, calling it “embarrassing” and a “big shame.”
He warned that efforts to halt the reform process would be a setback for the nation, urging stakeholders to support the tax reform bill without delay.
Oyedele highlighted that fears among state governors and the National Economic Council (NEC) over the reform’s impact on revenue distribution could be addressed without withdrawing the bill.
According to him, this bill aims to make the tax system fairer, helping low-income earners, small businesses, and even large firms by reducing corporate income tax rates to stimulate investment.
“There is so much at stake,” Oyedele emphasised, stressing the importance of not delaying reforms as Nigeria lacks “the luxury of time.”
A central concern in the reform debate has been the collection of Value Added Tax (VAT). While some governors have pushed for state-level VAT collection, Oyedele warned that such an approach could “lead to chaos.”
Allowing states to collect VAT, he argued, would create disparities thereby reducing the revenue some states would collect and potentially hurting businesses.
“If we get a judgment from the Supreme Court today that VAT should be collected and administered by states, that will be chaotic. States will collect less, businesses will suffer, and the economy will retrogress,” Oyedele said.
“If it doesn’t work, that would be a big shame for our country. I don’t know whether it will happen again in my lifetime where you have this level of commitment from the highest level for a holistic reform. I have done all my career in Nigeria. Nigeria’s tax system is one of the most backward in the world. it’s embarrassing. We had laws we inherited from our colonial masters. The stamp duty law is the law of 1939. We are in 2024. So, anything that stops the process of trying to reform that will be really, really sad. So I do want to envisage that option, “ he emphasized.
The proposed tax reform bill, he explained, suggests a unified approach where the Federal Inland Revenue Service (FIRS) would handle VAT collection on behalf of all states. By centralising VAT and other tax collections, the reform intends to enhance data accuracy, improve economic planning, and reduce compliance burdens on businesses.
“Whatever you do in Abia, whatever you do in Kogi, reflects on the system, and that helps us a lot,” Oyedele noted, emphasising the benefits of a streamlined, centralised tax collection system.
One of the committee’s initial concerns was resistance from Lagos but the state accepted to work with the committee.
Oyedele pointed out that while Lagos generates significant VAT, much of the VAT on imported goods and international services—which is a major revenue source—remains federal.
This revenue is not attributed to any specific state, making a federal pool necessary for fair distribution.
Currently, VAT revenue is shared among states based on a formula: 20 percent based on derivation (where the tax is generated), 50 percent based on equality, and 30 percent based on population. The committee’s proposal increases the derivation portion to 60 percent, with 20 percent each for population and equality. This adjustment is meant to ensure more fair and balanced distribution across states while still encouraging economic growth.
To further address state concerns, Oyedele said the federal government has agreed to reduce its VAT share, ceding 5 percent more to states. “I thought that should be good enough. It’s actually just saying to you as a state that your risk is zero, but the upside is significant,” he added.
In addition to VAT adjustments, the bill proposes other significant tax changes.
For instance, it suggests raising VAT to 10 percent by 2025, reducing corporate income tax to 27.5percent, and increasing the personal income tax for high earners from 20 percent to 25 percent.
Oyedele believes these changes would not only boost revenue but also incentivise states to promote economic activities within their jurisdictions.
However, the tax reform initiative has met resistance from certain lawmakers and officials. Oyedele revealed that some legislators have not fully read the lengthy bill, leading to misunderstandings.
“We will summarise for them,” he said, acknowledging that “trust is a problem.” The committee is working to address these concerns through dialogue and engagement, including reaching out to local revenue authorities to foster understanding and trust.
He also pointed out a legal gap in the 1999 Constitution that did not address VAT, which had already become a major revenue source by that time. This oversight has led some to argue that VAT should be a state matter. If the Supreme Court sides with this interpretation, Oyedele warns it would drastically reduce revenues and burden businesses with multiple compliance requirements.
On the other hand, the reform proposal aims to treat everyone equitably, clearing up misconceptions that state-level VAT collection would bring substantial revenue gains.
Beyond VAT, the reform package also includes proposals to streamline tax collection across Nigeria’s complex bureaucracy. Oyedele said the bills would halt revenue collection by federal agencies like the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigeria Customs Service (NCS), which presently operate outside their core mandates by collecting taxes.
Under the proposed system, approximately 60 federal agencies would no longer collect taxes, focusing instead on their primary functions, while tax agencies would handle all collections.
The new framework, according to Oyedele, is designed to encourage cooperation between federal and state tax authorities, promoting data sharing and intelligence building across jurisdictions. The proposed Joint Revenue Board would enable a unified tax system, where data flows seamlessly between states, local governments, and the federal government. “Working together, particularly in terms of data and tax intelligence as well as capacity building, is going to transform the system today,” Oyedele explained.
The tax reforms, if implemented, would simplify Nigeria’s tax landscape, making it more transparent and efficient. President Bola Tinubu has urged the National Assembly to pass the bills, which include the Nigeria Tax Bill, the Tax Administration Bill, and the Joint Revenue Board Establishment Bill. These reforms are intended not only to boost revenue but also to align Nigeria’s tax policies with international standards, thus promoting a more business-friendly environment.
Oyedele stressed that the proposed tax reforms represent a historic opportunity for Nigeria. Delaying or withdrawing the bill, he argued, would be a significant loss for the country. “If it doesn’t work, that would be a big shame for our country,” he said, underscoring the unique alignment of political will and economic necessity driving this initiative. By modernizing outdated laws and streamlining tax processes, the reforms aim to secure Nigeria’s fiscal future and stimulate its economic growth.
A total sum of N1.678 trillion, being February 2025 Federation Account Revenue, has been shared to the Federal Government, States and the Local Government Councils.
The revenue was shared at the March 2025 Federation Account Allocation Committee (FAAC) meeting held in Abuja; chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
The meeting was attended by the Accountant General of the Federation, Shamseldeen Ogunjimi.
The total distributable revenue of N1.678 trillion comprised distributable statutory revenue of N827.633 billion, distributable Value Added Tax (VAT) revenue of N 609.430 billion, Electronic Money Transfer Levy (EMTL) revenue of N35.171 billion, Solid Minerals revenue of N28.218 billion and Augmentation of N178 billion.
According to a communiqué issued by the Federation Account Allocation Committee (FAAC), total gross revenue of N2.344 trillion was available in the month of February 2025. Total deduction for cost of collection was N89.092 billion while total transfers, interventions, refunds and savings was N577.097 billion.
The communiqué stated that gross statutory revenue of N1.653 trillion was received for the month of February 2025. This was lower than the sum of N1.848 trillion received in the month of January 2025 by N194.664 billion.
Gross revenue of N654.456 billion was available from the Value Added Tax (VAT) in February 2025. This was lower than the N771.886 billion available in the month of January 2025 by N117.430 billion.
The communiqué stated that from the total distributable revenue of N1.678 trillion, the Federal Government received total sum of N569.656 billion and the State Governments received total sum of N562.195 billion.
The Local Government Councils received total sum of N410.559 billion and a total sum of N136.042 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
On the N827.633 billion distributable statutory revenue, the communiqué stated that the Federal Government received N366.262 billion and the State Governments received N185.773 billion.
The Local Government Councils received N143.223 billion and the sum of N132.374 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
From the N609.430 billion distributable Value Added Tax (VAT) revenue, the Federal Government received N91.415 billion, the State Governments received N304.715 billion and the Local Government Councils received N213.301 billion.
A total sum of N5.276 billion was received by the Federal Government from the N35.171 billion Electronic Money Transfer Levy (EMTL). The State Governments received N17.585 billion and the Local Government Councils received N12.310 billion.
From the N28.218 billion Solid Minerals revenue, the Federal Government received N12.933 billion and the State Governments received N6.560 billion.
The Local Government Councils received N5.057 billion and a total sum of N3.668 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
The Augmentation of N178 billion was shared as follows: Federal Government received N93.770 billion, the State Governments received N47.562 billion and the Local Government Councils received N36.668 billion.
In February 2025, Oil and Gas Royalty and Electronic Money Transfer Levy (EMTL), increased significantly while Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty and CET Levies recorded decreases.
Economy
Protesters urge president Tinubu to protect Diaspora housing investments along Lagos-Calabar coastal highway
A group under the aegis of Renewed Hope Concern Citizens (RHCC) on Friday staged a peaceful protest, calling for President Bola Tinubu’s intervention in protecting housing investments owned by Nigerians in the diaspora along the Lagos-Calabar coastal highway.
The protesters gathered in front of the United States Embassy in Abuja, carrying banners with inscriptions such as; Minister of Works, Senator Umahi should revert to the original gazetted alignment as promised. Enough is Enough; Association of Nigerian Diaspora Investors (ANDI) has cried enough, please intervene to save their energy to promote, support, and assist the Renewed Hope Administration; Renewed Hope Concern Citizens want Diaspora Investments to be protected and given adequate attention among others
“As committed stakeholders in the nation’s economic progress, we have consistently supported the government’s vision, particularly in revitalizing Nigeria’s infrastructure and energy sector. While we acknowledge the administration’s positive strides, recent developments have raised concerns about the misalignment of energy policies, particularly regarding the 2006 Gazetted alignment.
“We urgently call on the Minister of Works, Senator David Umahi, to restore the 2006 Gazetted alignment to ensure continued growth and stability in Nigeria’s energy sector,” said Hon. Tayo Agbaje, Chairman of RHCC, while addressing journalists.
The group refuted the Minister’s claim that an underground cable warranted the removal of structures in Okun Ajah, Lagos and outlined several reasons why President Tinubu’s intervention is crucial.
According to them, The 2006 Gazetted alignment has long provided a stable and predictable framework, essential for maintaining investor confidence in Nigeria’s energy sector.
“Diaspora investors contribute significantly to job creation, business growth, and the overall economy, making their protection vital to sustaining these contributions.
“The President should investigate the Minister of Works’ claim about the underground cable allegedly interfering with the 2006 Gazetted plan.
“Restoring the alignment will reinforce Nigeria’s commitment to a stable investment climate, boosting foreign investor confidence and attracting much-needed capital for infrastructure development.
“Deviating from established policies creates uncertainty, undermining both current and future foreign investments.
“Maintaining the 2006 Gazetted alignment will signal Nigeria’s dedication to long-term economic stability, further reassuring both local and international investors,” the group stated.
The RHCC reaffirmed its support for the Association of Nigeria in Diaspora Investments (ANDI) in its quest to uphold the 2006 Gazetted alignment plan of the Lagos-Calabar Coastal Highway.
They urged the government to act swiftly to protect diaspora investors, as this will strengthen Nigeria’s investment future and ensure continued economic success under the Renewed Hope Administration.
Economy
Ogunjimi promises to collaborate with ex-Accountants-General in taking treasury house to greater heights
The newly appointed Accountant General
of the Federation, Mr Shamseldeen B. Ogunjimi said he would collaborate and tap from the wealth of experiences of all Former Accountants -General of the Federation to bring the nation treasury to a greater height.
Mr Ogunjimi disclosed this while receiving two Former Accountants-General of the Federation, Dr John Naiyeju and Dr Ibrahim Dankwambo in his office in Abuja.
Speaking earlier, Senator Ibrahim Dankwambo suggested the upgrading of the Treasury Academy, Orozo owned by the Office of the Accountant-General of the Federation (OAGF) to a Degree (University) awarding Institute.
Also, Dr. John K. Naiyeju charged the new Accountant-General to carry along everyone and advised him to make staff welfare his priority.
In a related development, the Accountant-General of the Federation expressed his willingness to work with all professional organisation that will bring positive development to the nation, especially, his professional and Academy colleagues of the doctorate class.
Mr Ogunjimi called on his classmates to come up with ideas and suggestions that will enhance the management of the nation’s treasury that will positively affect the economy development.
In his remarks, the Chairman Forum of Doctorate Students, Ibrahim Aliyu said that they were in Treasury House to congratulate one of their own and assured him of their support towards his successful tenure.
-
News5 days agoBill to establish National Cashew Production and Research Institute in Kogi passes first reading in Senate
-
Security1 week agoNigerian Coast Guard: Citizens warned against extortion as passage of bill is being awaited
-
Politics1 week agoRetired military officer, colonel Gbenga Adegbola, joins APC with 13,000 supporters
-
Politics1 week agoCPDPL accuses Adeyanju of orchestrating smear campaign against FCT Minister Wike
-
News5 days agoReport of attack on Wike’s Port Harcourt residence false, misleading – Police
-
News5 days agoShehu Sani debunks Governor Uba Sani’s alleged diversion of LG funds, challenges El-Rufai to publicly tender evidence
-
News4 days agoPlateau gov’t expresses concern over violence in Shendam LGA, calls for calm
-
Sports6 days agoMerino gives Arsenal win over Chelsea