Urgent Call for Tax Reforms to Alleviate Economic Struggles in Nigeria

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has emphasized the urgency of enacting tax reforms to assist struggling Nigerians. His response to Governor Zulum’s criticisms centered on the need for a fair distribution of VAT revenues, highlighting the burdens of taxation small businesses face. Oyedele affirmed ongoing stakeholder engagement while asserting that prompt action is essential to combat poverty and spur economic activity.

The urgent need for tax reform in Nigeria has been highlighted by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who asserts that the forthcoming Tax Reform Bills must be enacted promptly to alleviate the struggles faced by Nigerians. During a recent interview, Oyedele addressed concerns raised by Borno State Governor, Professor Babagana Zulum, regarding the perceived haste in the reform process and the accompanying misconceptions about the proposed tax measures.

Oyedele emphasized that the implementation of a 60 percent derivation principle is essential for ensuring equitable distribution of Value Added Tax (VAT) amongst various states, thereby fostering economic development nationwide. He countered Governor Zulum’s assertion of urgency with evidence of the fiscal burdens many Nigerians endure, stating that small businesses currently face over 60 official taxes along with an additional 200 levies, alongside worrying inflation rates leading to increased hardship for families.

In response to Governor Zulum’s call for a pause in proceedings to address potential regional inequities, Oyedele noted that the committee has been engaging with state governors and stakeholders for over a year, sharing drafts of the proposals and encouraging dialogue. He rejected any notion of rushing the legislation, as the bills have already been undergoing scrutiny in the National Assembly for more than a month. Oyedele stressed that rapid action is critical, likening the current situation to an emergency requiring prompt legislative response similar to that witnessed globally during the COVID-19 pandemic.

Additionally, he pointed out that misconceptions circulating about the benefits of the proposed VAT structures have led to unexpected resistance from regions that were not the intended opposition. The tax reforms aim to address longstanding inequities in revenue distribution within Nigeria by adopting a new framework for allocating VAT revenue amongst the federal and state tiers of government. Despite the controversies, Oyedele remains optimistic about constructive engagement with all stakeholders involved, asserting that reforming the tax regime is vital for Nigeria’s development and economic resilience.

Mr. Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, calls attention to the pressing issue of tax reform needed to tackle the prevailing economic challenges facing Nigerians. The proposed Tax Reform Bills are currently before the National Assembly, aiming to introduce a derivation principle to improve the equity of VAT distribution. This initiative aims to address complaints about the tax structure that is perceived to favor certain states, particularly Lagos and Rivers. Governor Babagana Zulum’s concerns reflect a wider sentiment among northern stakeholders who argue that the reforms might not serve their regional interests. Oyedele’s response highlights the necessity for immediate legislative action to mitigate poverty and support struggling businesses amid rising inflation.

In conclusion, the dialogue surrounding Nigeria’s tax reforms underscores the urgent need for legislative action to address the economic hardships faced by a significant portion of the population. Mr. Oyedele’s clarifications regarding the reform process and the engagement with state governors emphasize the importance of inclusivity and equity in tax distribution. As the National Assembly scrutinizes the bills, a collaborative approach is essential to ensure that all regional interests are addressed, while maintaining a focus on the overarching goal of alleviating poverty and promoting economic growth across the nation.

Original Source: punchng.com