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Tax Overhaul Incoming! FG Plots Aggressive Revenue Growth – Oyedele
The Federal Government has set an ambitious target to raise Nigeria’s tax-to-GDP ratio from below 10 percent to at least 18 percent within the next three years. This was disclosed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during an interview on Arise TV on Thursday.....KINDLY READ THE FULL STORY HERE▶
Oyedele said the goal will be driven by extensive tax reforms recently signed into law by President Bola Tinubu. These measures, he explained, are not only intended to boost government revenue but also to overhaul the tax system, addressing inefficiencies and promoting fairness.
“Nigeria’s economy is valued at roughly ₦270 to ₦300 trillion — not large enough — but the real issue is the embarrassingly low tax yield,” Oyedele said. “Until last year, we were operating below 10%. In comparison, South Africa is at 26%, and countries like France exceed 30% or even 40%. The gap between what we collect and what we should be collecting is as high as 70%. That means we’re not only losing revenue, but also unintentionally rewarding tax evaders, while compliant citizens shoulder the burden.”
He explained that the newly signed tax laws introduce mechanisms that make it harder and costlier to evade taxes, while simplifying compliance for honest taxpayers. “Without raising taxes, we believe we can close the gap by more than half — effectively doubling Nigeria’s tax revenue,” he said. “That’s why we’re confident we can push the tax-to-GDP ratio to a minimum of 18% in three years.”
The sweeping reforms include the Nigeria Tax Bill, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Bill. One of the most impactful changes is the exemption of individuals earning less than ₦1 million annually from personal income tax — a major shift from the previous threshold of ₦300,000, which was taxed at up to 7%.
Oyedele added, “Also, small businesses with an annual turnover below ₦50 million will no longer pay company income tax. Corporate income tax remains at 30%, and VAT is fixed at 7.5%. However, there will be no VAT on essential items like food, education, healthcare, rent, and public transportation.”
He emphasized that beyond revenue collection, the reform aims to restore public trust by ensuring transparency and accountability in the use of tax funds.
“People often ask, ‘What happens after you collect the money?’ Our reforms also address how the revenue is spent — aiming for openness, accountability, and a renewed social contract where governance truly serves the people,” Oyedele stated.
He acknowledged that these changes were long overdue. “Frankly, this reform should have happened 30 years ago,” he said. “That’s why I continually credit President Tinubu. He’s shown exceptional political will and courage. At the peak of public backlash, he never wavered — even when some provisions were included without his full awareness, he didn’t shift blame. That’s leadership.”
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