Rich Nigerians Must Pay More Tax – Oyedele

• As FG seeks cushioning for Nigeria’s poor

BY EDMOND ODOK – If everything goes according to plan, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says rich Nigerians must brace up to pay more tax while the country seeks to make the poor comfortable with lesser tax commitments.

Accordingly, Oyedele said the Committee’s reforms have proposed that the country’s wealthiest citizens pay their Personal Income Tax (PIT) at the rate of 25 percent beginning from next year

He said Nigerians who are supposed to pay tax must henceforth fulfill their obligations as the country seeks to address the current tax gap which stands at about 75 per cent.

This is as he also disclosed that the government was working to ensure personal income tax reduces for Nigerians earning below N1.5million monthly when the Economic Stabilization Bill is eventually passed into law.

Further explaining the Committee’s position, Oyedele said currently before the National Assembly (NASS) is a bill that aims to provide relief to Nigerian taxpayers, adding that once passed, the new law will take effect in January 2025, reducing the tax burden on low-income earners while imposing higher taxes on the wealthy.

Oyedele, who spoke as one of the panelist at the ongoing 30th Nigeria Economic Summit #NES30 with the theme “Fiscal and Monetary Policy Reforms: Removing Barriers to Private Sector Investment”, said; “the rich people earning N1.5 million and above will see their personal income tax rise by up to 25 per cent.”

He said survey by Nigeria Economic Summit Group (NESG) indicate that “only 17 per cent Nigerians pay taxes as well as 30 per cent of businesses and one of the reasons is because they don’t trust government”, noting; “Many people don’t like to pay taxes, but they often fail to realize that those taxes will eventually benefit them”.

According to him; “We have been very intentional about reducing the tax burden on businesses. For instance, today, whatever VAT you pay on assets, whether you’re building a factory, purchasing a laptop, or buying vehicles, is borne entirely by the business. This increases your costs, which in turn raises prices. However, with our reforms, you will receive a 100% credit on services and assets.

“Therefore what we want to do is to have a National portal just like South Africa where tax payment is seamless and transparent because or current tax gap is about 70-75 per cent but if we correct that and everyone pays, our revenues will be four (4) times.”

However, he admitted that there are challenges to overcome in the process, saying; “Another worrisome issue is policy gaps where we grant unnecessary waivers to some people who don’t even deserve it. But the main challenge remains compliance issue”.

While addressing issues around the incentives for businesses, the Committee Chairman said; “That currently before the National Assembly is a policy document that is targeted at reducing tax burden on businesses and once our reforms are implemented, corporate income tax rate will reduce from 30 to 25 per cent we are hopeful it comes on board in January 2025.”

He said among the recognized lowest hanging fruits that the Presidential Committee seeks to tackle is removing disincentives as contained in the Economic Stabilization Bill currently in the National Assembly, adding that the document has also harmonized over 60 official taxes being paid by Nigerians.

On his part, CBN’s Acting Director of Banking Supervision, Dr Adetona Adedeji, said among the innovations introduced by the apex Bank is a robust risk management system.

Adedeji, who made intervention on what the monetary side is doing, stated thus; “We want a situation every bank will put in place a cyber security management mechanism to boost investor confidence and trust.

“While on the other side, we are accelerating our inflation targeting to ensure price we have been doing a lot and what we are doing now is Inflation targeting to ensure we get price stability because without price stability we won’t achieve it.”

Assuredly, the Director said the apex Bank will continue to collaborate with all relevant stakeholders to address policies that negatively impacts people’s lives.

For him, no stone should be left unturned in rectifying and fixing worrying policies in the overall interest of Nigerians.