No new taxes, just fairer rules – Taiwo Oyedele

Nigeria’s ongoing tax reforms are not about introducing new levies or imposing additional burdens on citizens, despite widespread misconceptions. Rather, the current administration says its goal is to simplify the tax system, promote fairness, and ease compliance, especially for low-income earners and small businesses.

“President Tinubu has not imposed new taxes. Instead, he has suspended and reversed some of the taxes introduced by the past administration, ”Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, said.

He said this at a recent National Orientation Agency (NOA) Dialogue on X Space titled “Simplifying Nigeria’s Tax System: Building Public Trust and Inclusive Growth Through Transparent Fiscal Reforms.” Experts reassured Nigerians that the ongoing tax reforms are not about introducing new levies, but about making the system fairer and easier to navigate.

Oyedele said the reform aims to reduce Nigeria’s more than 60 existing taxes to fewer than 10, while simplifying compliance and eliminating overlapping levies across federal, state, and local governments.

He said the move is part of a broader effort to improve efficiency, support small businesses, and build public trust in tax administration.

“We are building a system that will make it hard for people to evade tax when they make money,” Oyedele said. “At the same time, we are exempting low-income earners and small businesses that have been carrying Nigeria for so long.”

Under the new framework, individuals earning up to N100,000 per month will be exempt from personal income tax. At the same time, small businesses with an annual turnover of up to N100 million will be exempt from corporate income tax. In addition, new farmers will enjoy a five-year full tax holiday regardless of investment amount, and farming activities will remain VAT-exempt.

Oyedele said the government’s analysis showed a 70 percent tax gap, the difference between actual and potential tax collections, which the reforms aim to close through digitalization and stronger enforcement rather than higher rates.

“Our simulation shows we can triple revenue if we simply collect correctly,” he explained, adding that wealthier individuals and large firms, not low-income earners, account for most of Nigeria’s tax evasion.

He also clarified that personal income tax remains under the jurisdiction of state governments, in line with the Constitution. “This reform does not change that. Nigerians should hold their state governments accountable for how they use personal income tax revenues,” he said.

A key aspect of the reform is the introduction of a unified digital platform for tax administration, supported by the National Payment Stack (NPS). The system will enable electronic filing, real-time tracking, and pre-populated tax returns to reduce administrative burdens and opportunities for corruption.

Oyedele said the platform will make it easier for taxpayers to comply without physical interactions. “We are automating most processes, including tax clearance certificates, to remove the need for middlemen,” he stated. “The new Office of the Tax Ombudsman will also handle complaints and whistleblower reports.”

He emphasized that bank charges are not government taxes and clarified that the Value Added Tax (VAT) rate has not increased. “If you notice higher deductions, it’s likely from service providers, not from government policy,” he said, urging citizens to report incorrect charges.

Addressing concerns about the new 25 percent capital gains tax, Oyedele explained that the rate is comparable to those in other African markets and includes provisions for deductions and exemptions to encourage reinvestment. “Investors can offset exchange losses and expenses, and if they reinvest their profits, they will not pay capital gains tax,” he noted.

“The goal is to make the system fairer and more predictable, not punitive.”

He added that exemptions would apply to portfolios below N150 million, meaning that most individual investors would not be affected. The broader objective, he said, is to promote long-term investment and discourage speculative trading that destabilizes markets.

Michael Chibuzo, a Public affairs analyst, noted that the government’s tax reform efforts are intentionally designed to protect the most vulnerable. “The tax reform is for the most vulnerable in Nigeria,” he said. “The tax law is pro-poor. There is no part of it that is burdensome on people. In fact, 90 percent of small businesses will be exempted from tax.”

Chibuzo also dismissed the growing perception that the reforms would enable government agencies to make automatic deductions from citizens’ bank accounts.