The Federal Government has taken a significant step to alleviate the longstanding concerns of manufacturers and brand owners by drastically reducing the burden of taxes and levies. The decision, which has been widely anticipated, is poised to have a profound impact on the business landscape of the nation, News About Nigeria reports.
The move, which saw the reduction of taxes and levies from a staggering 200 to a mere 10, comes as a result of recommendations made by the Presidential Committee on Tax Reforms and Fiscal Policy. This groundbreaking action is expected to serve as a much-needed respite for businesses that have long lamented the challenges of navigating the complex and burdensome tax system.
Chairing the committee, Mr. Taiwo Oyedele, provided insights into the committee’s mission and its broader implications. He explained that the core objective of the committee is to streamline and consolidate taxes and levies at all levels of government, significantly reducing the total number to less than 10. This move aims to create a more business-friendly environment in Nigeria and eliminate the obstacles that have hampered the growth of businesses and brands.
One of the fundamental goals of the committee is to reform the nation’s tax policy, which has been perceived as a hindrance to businesses operating in Nigeria. Mr. Oyedele revealed that the committee has already embarked on the task of rewriting the country’s tax laws, as part of the process to establish a more standardized and effective tax administration.
Interestingly, Oyedele emphasized that the restructuring of Nigeria’s tax system will not be accomplished through legal battles, citing the complexities surrounding the Value Added Tax (VAT) as an example. Instead, the approach will involve engaging stakeholders in extensive deliberations and working closely with the National Assembly to bring about the necessary reforms.
The prevailing situation of unofficially having more than 200 different taxes in Nigeria has been a significant challenge for both businesses and the general population. Mr. Oyedele underscored that approximately 96% of the total revenue collected by federal, state, and local governments is derived from a small set of fewer than 10 taxes in the country. This move to simplify the tax landscape is expected to ease the financial burden on citizens and improve the overall business climate.
In a proactive step toward comprehensive reforms, the committee has already commenced public consultations and stakeholder engagement to address contentious issues surrounding the VAT law. Oyedele emphasized that solutions will only emerge through the active participation of Nigerians, rather than through legal proceedings.
Mr. Oyedele expressed his optimism for the future, stating, “So all we did today was to formally present the report to Mr. President, but I will say that once we get the nod from Mr. President, it will be like just switching on the tap, and then the implementation starts immediately. There’s so much work for us to do; this is just milestone number 1, what we call the ‘quick wins.’ The second phase, which is where we are now, is the critical reforms. Those critical reforms involve even rewriting our major tax laws, addressing something that everybody in this room will be very much familiar with; the multiplicity of taxes.”
This momentous decision to drastically reduce taxes and levies is expected to usher in a new era of economic growth and prosperity for Nigeria, signaling a more business-friendly and simplified tax regime. Furthermore, President Tinubu’s directive for the immediate implementation of recommendations by the Presidential Fiscal Policy and Tax Reform Committee underscores the government’s unwavering commitment to creating a more conducive environment for businesses and brands in the country.
