JUST IN: FG To Scrap Over 50 Taxes, Says Tinubu’s Tax Committee Chairman

… To Set Up Tax Ombudsman For Small Businesses

The Federal Government has declared its intention to scrap about 50 taxes in Nigeria. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this on Tuesday.

Oyedele said the decision will enable Nigerians to comply with tax payments and reduce the burden of compliance with tax obligations.

The presidential tax committee chairman revealed the plans during a discussion organised by the IMF’s Tax Administration Diagnostic Assessment Tool (TADAT) secretariat, where he spoke on key considerations and ongoing tax reforms of the Bola Tinubu administration.

Oyedele said, “There are over 60 taxes officially and unofficially, nobody knows. I think it is more than 200. We did a study 10 years ago for manufacturers and there was a state where if you combine all the taxes across all levels of government, it was more than 197 and that is just for one state.

“What we are trying to do now is to focus on the most important taxes. You don’t need to be a tax expert to know Income Tax, consumption tax by way of VAT, Property Tax and Excise Tax. Those important taxes are the ones we want to focus on and do away with other taxes. Then, harmonise the number of taxes not only for manufacturers but for everyone.

“We are currently at the stage of consultation where we are going to be speaking to our stakeholders to try and understand the problems from their perspective and bring the solution that we want. We are focusing on the outcome approach; we say we have reduced the taxes from over 60 to less than 10. It means that there will be clarity for compliance and the burden of compliance is less in the situation of the tax because it is now unified.”

President Tinubu in July set up the committee to formulate a functional tax policy that would remove all barriers impeding business growth in Nigeria.

Since its inception, the committee has emphasised that it has no plans to increase the number of taxes but to ensure that the tax bracket is expanded.

Oyedele explained during the discussion that the priority of the committee “if I put it in the form of the thematic areas is: one to ensure that there is fairness in the tax system, two, to ensure efficiency in the tax system and three is to build trust between government, tax administrators and taxpayers and broadly the Nigerian people.

“If you then talk about the fairness of it, we are going to ensure that the burden of compliance, small business pay too many taxes and the burden of compliance relatively is much higher. We are going to leverage a lot of technology.”

According to the tax expert, the efficiency would come from the administration and use of technology.

Oyedele reiterated that the committee is committed to building trust and ensuring there is proper accountability and transparency which he referred to as one of the calls of the TADAT assessment.

He revealed further that there are ongoing plans to create an ombudsman in Nigeria with the responsibility of protecting small businesses.

He said, “It takes so long for people to get justice within the tax system. For the large companies, they can afford it. But small business owners, can’t even afford professional representation. They cannot pay an accountant; they cannot pay a lawyer.

“So, we are looking at setting up the office of a tax ombudsman in Nigeria that can intervene and protect. One, it will have a kind of oversight over the work of the revenue authorities and protect taxpayers especially those who cannot defend themselves. These are going to be the areas of priority for us.”