Nigeria’s ongoing tax reforms are crucial to building a globally competitive, equitable, and fiscally sustainable economy, according to Mr. Taiwo Oyedele, the country’s Minister of Finance and Coordinating Minister of the Economy.
Oyedele made the statement during his address at the 28th annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN), held in Abuja on Tuesday. The conference, themed Tax Reforms and Global Relevance: Positioning Nigeria’s Tax System for a Sustainable Future, was organized to discuss the country’s evolving tax policies.
Speaking at the event, Oyedele emphasized that the reforms were designed to support long-term national development and bolster the country’s economic resilience. He stressed that the tax system is a vital tool for sustaining economic growth, attracting investment, and ensuring fairness across various sectors.
The minister noted that the global economic landscape has seen rapid changes, with digital economies and shifting supply chains influencing national economic stability and competitiveness. As countries adapt to these global transformations, Oyedele stated that Nigeria must modernize its fiscal systems to remain relevant.
“Countries that fail to modernize their tax systems risk weakened economic resilience, greater inequality, and loss of investor confidence,” he said. He highlighted that citizens now demand more transparency, fairness, and accountability in public services, making it imperative for the government to strengthen the tax system.
A major challenge, according to Oyedele, has been the long-standing weaknesses within Nigeria’s tax administration, which include issues such as multiple taxation, weak compliance, informal economic activities, and inconsistent enforcement. These challenges have hindered businesses and created a perception of unfairness among taxpayers.
The minister explained that the country’s previous tax structure was inadequate in generating sufficient revenue to meet national development needs. As such, the current reforms aim to create stronger fiscal foundations capable of supporting infrastructure development and sustainable economic growth.
One of the key features of the reforms is the simplification of the tax process. Oyedele mentioned that the new framework focuses on reducing disruptions, improving revenue collection, and encouraging voluntary compliance. It also aligns tax administration with broader economic objectives, aiming to improve productivity and foster growth.
In a significant step towards fairness, the reforms also exempt low-income earners, including minimum wage workers, from personal income tax. This move, Oyedele said, was designed to protect household income and ensure greater equity within Nigeria’s tax system.
The minister also addressed concerns from businesses about multiple taxation, particularly the lack of coordination between revenue agencies. He announced that 15 states had already enacted tax modernization laws, with more states expected to follow suit to create a more investor-friendly environment.
Furthermore, Oyedele praised the role of the CITN in shaping national fiscal policy, stressing its continuous engagement with stakeholders to improve tax administration in Nigeria.
Mr. Innocent Ohagwa, President of CITN, commended President Bola Tinubu and the National Assembly for their support of comprehensive tax reforms. He pointed out that these reforms are a critical step towards reducing Nigeria’s dependency on oil revenue and shifting to a tax-driven economy.
Ohagwa also emphasized the importance of transparency and accountability, urging tax professionals to uphold high ethical standards in their work to foster greater public trust and ensure the success of the tax reforms.
Dr. Tope Fasua, Special Adviser to the President on Economic Affairs, added that Nigeria’s tax reforms are vital for sustainable growth and enhancing investor confidence. He explained that the reforms, which include the simplification of tax categories, have already begun to yield positive results, including a rise in Nigeria’s tax-to-GDP ratio from 6% to 10% in just three years.
The government’s target is to increase the tax-to-GDP ratio to 18% and reduce the company income tax rate from 30% to 25% to further encourage investment.
