Lagos, Nigeria – Taiwo Oyedele, Chairman of Nigeria’s Presidential Tax Reform Committee, has called for urgent adjustments to the country’s tax framework, including lower corporate rates and reduced regulatory hurdles, to attract investment and stabilize the naira.
Key Unfinished Reforms
Corporate Tax Cuts:
-
Current 30% rate risks “taxing capital, not profit” amid high inflation.
-
Proposal: Reduce rates to match regional peers (e.g., Kenya’s 24%, South Africa’s 27%).
Tariff Overhaul:
-
Raw material tariffs double Sub-Saharan Africa’s average.
-
Reform could act as a de facto tax waiver for manufacturers.
FX Policy Alignment:
-
Allow tax payments in naira to reduce dollar demand pressure.
-
Limit discretionary forex allocations distorting the market.
Digitalization & Transparency:
-
Implement tax intelligence systems to curb corruption.
-
Enforce beneficial ownership laws and unexplained wealth orders.
Why This Matters
Naira’s Underperformance:
-
Despite similar trade balances, the naira lost 6x more value than Kenya’s shilling or South Africa’s rand (2015–2025).
-
Fixing tariffs/regulations could have made Nigeria a $1 trillion economy today.
Business Impact:
-
High taxes stifle SME growth and foreign investment.
-
Simplified compliance could formalize 80% of Nigeria’s informal sector.
Oyedele’s Warnings
Avoid Populism:
-
“After the applause, the pain remains” – Reforms must prioritize long-term growth over short-term optics.
Government’s Role:
-
Focus on what the private sector can’t do (e.g., infrastructure).
-
Minimize taxes without compromising service quality.
Progress So Far
4 New Laws Signed:
-
Nigeria Tax Law
-
Nigeria Tax Administration Law
-
Nigeria Revenue Service Law
-
Joint Revenue Board Law
Early Wins:
-
Income tax exemption for 1/3 of workers.
-
Higher thresholds for small businesses.
-
Tax ombudsman to advocate for fairness.
What’s Next?
Corporate Tax Bill: Expected Q3 2025.
Customs Tariff Review: To align with AfCFTA rates.
Digital Tax Systems: Pilot launch by year-end.
