Urgent Need for Tax Reforms in Nigeria Highlights Economic Struggles
Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized the urgency of tax reforms in Nigeria due to widespread economic struggles. Addressing concerns from Governor Zulum regarding the pace of the proposed Tax Reforms Bills, Oyedele defended the necessity for swift action to alleviate poverty and economic burdens, highlighting the disproportionate tax levies impacting small businesses and urging further dialogue among stakeholders.
The urgency of implementing tax reforms in Nigeria has been highlighted by Mr. Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. During an interview with Arise News, Oyedele stated that the Tax Reforms Bills currently before the National Assembly are essential due to the financial struggles faced by many Nigerians. He emphasized that these reforms, including a proposed 60 percent derivation principle on VAT, aim to promote equity in revenue sharing and stimulate economic activities across the nation.
In response to concerns raised by Borno State Governor, Professor Babagana Zulum, regarding perceived hasty enactment of the tax bills, Oyedele defended the timeline of the reforms. Zulum had voiced the need for further consultations, citing misconceptions surrounding the benefits of the VAT allocation, which he argued primarily favor Lagos and Rivers States at the expense of Northern Nigeria. Oyedele, however, affirmed that the urgency for action parallels the global response to crises like the COVID-19 pandemic, urging for swift relief measures to address the poverty and inflation challenges faced by the populace.
Oyedele expressed that small businesses are currently overwhelmed with an excessive number of official and unofficial taxes, contributing to widespread hardships. He pointed out that, despite an officially low unemployment rate, many Nigerians struggle to find decent work, exacerbating the nation’s poverty crisis. He further clarified that discussions with state governors had taken place prior to the introduction of the bills, but the rapid engagement of the legislative process was necessary to provide timely relief for the citizens. Furthermore, he acknowledged unexpected pushback from Northern states, suggesting a need for increased dialogue moving forward.
The proposed reforms focus on altering the distribution of VAT revenues and addressing the inequities currently present in the taxation system. The introduction of a derivation model aims to ensure a fairer allocation of resources between federal and state governments, although it has sparked significant controversy among regional leaders who fear potential disadvantages for their constituencies.
In Nigeria, tax reforms have become a pressing issue as economic challenges persist, exacerbated by multi-dimensional poverty and high inflation affecting the populace. The Presidential Committee on Fiscal Policy and Tax Reforms has proposed new legislation before the National Assembly targeting the allocation and collection of Value Added Tax (VAT). This proposal includes a derivation model intended to create more equitable revenue sharing across states. Historical tensions regarding fiscal distributions have surfaced amidst discussions on these reforms, particularly concerning their implications for different regions of the country. Governor Babagana Zulum’s criticisms illustrate the concerns from Northern states about the legislation potentially favoring Southern states such as Lagos and Rivers. As the debate unfolds, stakeholders are grappling with the urgency of enacting reforms that would alleviate the financial burdens on individuals and small businesses.
The recent remarks by Mr. Taiwo Oyedele underscore the critical nature of enacting tax reforms in Nigeria to address pressing economic struggles faced by the populace. While Governor Zulum raised valid concerns regarding the perceived haste of the proposed legislation, Oyedele’s emphasis on urgency reflects the alarming reality of poverty and inflation in Nigeria. As discussions continue in the National Assembly, it is vital that all stakeholders engage constructively to finalize reforms that promote equity in tax distribution while also supporting the economic resurgence needed to uplift many Nigerians from hardship.
Original Source: punchng.com
