Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reform Committee, says resistance to Nigeria’s tax reform is coming mainly from people who have made money for years but do not want to pay taxes.
Oyedele spoke at the January Business Breakfast of the Franco-Nigerian Chamber of Commerce and Industry in Lagos.
Oyedele Compares Nigeria and South Africa’s Tax Revenues
He said South Africa generated over ₦60 trillion from personal income tax alone in 2024. He said the figure is higher than Nigeria’s total revenue from all taxes combined.
According to him, Nigeria generated less than ₦3 trillion from personal income tax during the same period. He described the gap as troubling, adding that the numbers do not add up.
Income Levels Not the Main Issue
Oyedele acknowledged that South Africa’s capital income is higher than Nigeria’s. However, he argued that Nigeria has enough high-income earners to generate comparable revenue if properly taxed.
He said capturing the top income earners in Nigeria would significantly improve revenue. The economist added that weak tax collection, not lack of wealth, remains the country’s major challenge.
Pushback Linked to Accountability
Oyedele said the reform has attracted strong resistance because it seeks to ensure that no one is above the law.
He said many individuals and businesses have made money for years without paying taxes. According to him, efforts to enforce compliance naturally attract opposition.
Oyedele said the government understands the pushback but will not compromise the country’s future to protect vested interests.
Why the Government Is Pushing the Reform
Oyedele said the stakes of the tax reform are much bigger than individual discomfort. He said Nigeria needs a fair, transparent, and efficient tax system to achieve sustainable development.
He added that proper tax compliance is critical to reducing poverty and funding public services.
Background: Nigeria’s Tax Reform Law
Nigeria’s current tax reform agenda took effect on January 1, following amendments to existing tax and fiscal laws aimed at widening the tax net and improving revenue collection.
The reforms focus on efficiency, transparency, and digital tax administration. They also aim to reduce Nigeria’s dependence on oil revenue and strengthen non-oil tax income.
Controversy Over Third-Party Tax Deductions
The reform has generated controversy, particularly in Lagos State. The Lagos State Internal Revenue Service (LIRS) recently said it has the power to recover unpaid taxes through third-party deductions.
Under the policy, LIRS can instruct banks and other institutions to deduct taxes directly from the accounts of tax defaulters. The announcement sparked public backlash, with critics raising concerns about due process and possible abuse.
LIRS, however, maintains that the measure targets chronic tax defaulters and is backed by existing tax laws.
Oyedele Defends Reform Direction
Oyedele said resistance is expected when accountability increases. He said the reform is necessary to secure Nigeria’s economic future.
According to him, Nigeria can no longer sustain a system where wealth exists but taxes are not paid.
