President of the Senate, Godswill Akpabio and the chairman of the Presidential Fiscal Policy and Tax Reform Committee, Mr Taiwo Oyedele, have differed on the Nigerian tax system.
While speaking at the opening on Monday at the Senate public hearing on tax reforms, Akpabio lamented that many Nigerians want to enjoy the good life but are unwilling to pay taxes.
Akpabio noted that only 30 per cent of Nigerians pay their taxes, whereas 100 per cent of them expect to enjoy functional infrastructure like good roads and improved healthcare services, among others.
On the other hand, Oyedele faulted the existing tax system in Nigeria, pointing out that the poor, rather than the wealthy, are being made to shoulder the burden of taxation.
While speaking with finance correspondents on Sunday, Oyedele said, “Our current tax system is counterproductive. We must stop taxing poverty and capital and instead focus on profits to encourage business growth.”
The tax reform committee chairman noted that the poor in Nigeria pay about 90 per cent of income tax, thereby worsening the poverty situation in the country.
Advocating reforms that exempt low-income earners while taxing the wealthy, Oyedele cited the case of South Africa, where only one per cent of the population contributes 90 per cent of personal income tax revenue.
Analysts attribute the unwillingness of most Nigerians to pay tax on poor service delivery in terms of infrastructure and social amenities.
The public hearing is being organised by the Senate Committee on Finance to fine-tune the various aspects of the Tax Reform Bills forwarded to the National Assembly by President Bola Tinubu in October 2024.
The bills had generated heated controversy among stakeholders, including the 36 state governors and some lawmakers in the two chambers of the National Assembly.
The governors, reacting through the National Economic Council (NEC), had called on President Tinubu to withdraw the bills and allow for broader consultations.
However, the governors, following a meeting with the Presidential Fiscal Policy and Tax Reform Committee in January, eventually endorsed a revised version of the tax reform bills.
In the revised version, the VAT derivation revenue accruable to states was reduced from 60 per cent to 30 per cent among other reviews.
Among dignitaries at Monday’s public hearing are the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari; chairman of the Federal Inland Revenue Service (FIRS), Zacchaeus Adedeji; Comptroller General of the Nigeria Customs Service (NCS), Adewale Adeniyi; a former President of the Nigerian Bar Association (NBA), Yakubu Maikyau; and chairman of the Tax Reform Committee, Taiwo Oyedele.