Oyedele, Alaje disagree on tax reforms

Oyedele, Alaje disagree on tax reforms

Oyedele, Alaje disagree on tax reforms
The ongoing tax reforms will accelerate the economic growth of the country when it comes into operation, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said

But the Chief Economist at SPM Professionals, Dr Paul Alaje, disagreed with Oyedele, saying that there are significant concerns in the proposed reform that must be addressed.

In the the keynote at the yearly general meeting of the Finance Correspondents Association of Nigeria (FICAN) in Abuja, Oyedele argued that the reform offers a healthy gateway to accelerate economic growth and contribute to shared prosperity.

He suggested broadening the country’s tax base and enhancing tax compliance through the efforts of relevant authorities and stakeholders.

“Revenue mobilisation for development through broadening the tax base and enhancing compliance is projected to significantly increase government revenues,” Oyedele said.

He emphasised that the implementation of the reforms, currently in the form of bills before the National Assembly, noting that the bills have the potential to lead to macro-economic stability, revenue mobilisation and healthy fiscal balance.

He also highlighted the improved tax-to-GDP ratio, enhanced credit rating and lower cost of debts that could result from the reforms

The tax expert maintained that reaping the benefits of an efficient tax system does not depend on imposing more burdens on the people, but on ensuring compliance.

“Allowing tax evasion to persist is itself a disincentive to honest individuals who are doing their business and paying their taxes,” he said.

He further elaborated that the funds generated from taxes will provide the resources necessary for substantial government investment in critical infrastructure, healthcare, and education and will serve as the foundation for economic growth in the future.

Oyedele noted that exempting small businesses from the company income tax (CIT) will alleviate financial pressure and encourage the growth of small and medium-sized enterprises (SMEs), which are crucial for job creation and innovation.

He observed that a transparent and simplified tax regime would position Nigeria as a more enticing destination for both domestic and foreign investment, fostering industrial expansion and technological advancement.

Oyedele added that the proposed tax structure aims to reduce inequality by ensuring that high-income earners contribute their fair share while providing incentives and exemptions to support vulnerable groups and small enterprises.

The proposed tax reform has drawn criticisms as stakeholders think such reforms can only increase the economic burden on the populace, but Oyedele does not think so, saying: “We have been engaged and will continue to engage with our key stakeholders to ensure that all concerns are satisfactorily addressed in our collective interest.”

He argued that the contents of the tax reform bills are specifically designed to reduce the burden on the Nigerian people.

He emphasised that the tax reforms are not just technical exercises, but a commitment to equity, efficiency and economic transformation.

However, Alaje insisted that there are concerns that should be addressed.

In a paper titled ‘Tax Reform as a Pillar for Economic Prosperity: the Necessities and Concerns’, he pointed at the proposed increase in VAT rates from 10 per cent in 2025 to 12.5 per cent in 2026 as disturbing.

However, he conceded that the new tax reform could improve tax compliance by capturing new sectors, such as freelancers and self-employed individuals

Alaje advocated the convocation of comprehensive stakeholder consultations and phased implementation strategies to allay the growing apprehension among critical stakeholders.