Multiple Taxation: Tinubu To Scrap 190 Taxes


The Presidential Committee on Fiscal Policy and Tax Reforms has made a bold move in the quest to eradicate the issue of multiple taxation, urging the government to eliminate a staggering 190 taxes that have been stifling businesses in the country.

President Bola Tinubu, during a brief ceremony at the Presidential Villa in Abuja, endorsed the panel’s far-reaching recommendations on tax and fiscal policies.

Multiple taxation has been a thorn in the side of businesses, and the Organised Private Sector (OPS) has pointed fingers at state governments for exacerbating this problem. The OPS expressed its concerns about the adverse effects of multiple taxes on production costs, profit margins, supply chains, and consumer spending. Specifically, telecommunication operators decried their sector as one of the most heavily taxed, with over 40 different taxes directed at telecom firms.

Gbolahan Awonuga, the Head of Operations at the Association of Licensed Telecoms Operators of Nigeria, placed the blame for multiple taxes squarely on state governments.

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In response to the challenging business environment, President Tinubu initiated fiscal policy and tax reforms in August. This initiative was aimed at enhancing the country’s revenue generation and business climate. The committee, chaired by Mr. Taiwo Oyedele, presented its recommendations, including the merger of over 200 taxes paid by Nigerian businesses into just 10. They also proposed an emergency economic intervention bill and the issuance of Presidential Executive Orders to streamline government functions and optimize the use of government assets and natural resources.

President Tinubu commended the committee’s efforts and pledged his support for the review and implementation of key recommendations. He granted the committee’s request to address the Federal Executive Council and inform cabinet members about their work and expected outcomes, which would facilitate economic growth.

The Federal Inland Revenue Service (FIRS) pledged to implement the recommendations where applicable, pending the President’s approval. The acting Chairman of the FIRS, Mr. Zacch Adedeji, emphasized the importance of fiscal policy in maintaining economic stability and diversifying revenue sources, given the country’s historical dependence on oil.

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Oyedele argued that, rather than increasing revenue, multiple taxation had shrunk the Federal Government’s internally generated revenue pool. He highlighted the existence of over 60 official taxes and levies, collectible by federal, state, and local governments, and an additional 200 unofficial ones, which have been making life difficult for citizens and businesses. The committee’s goal is to streamline these taxes to less than 10.

The committee has been actively engaging with various stakeholders, including policymakers, state governors, the Senate, and the House of Representatives. They plan to continue public consultations and stakeholder engagement until November 15.

The effort to eliminate multiple taxation is not just about reducing the tax burden but also about promoting business growth and employability in the global gig economy. Removing these impediments will not only benefit individuals but also boost the nation’s economy.

The telecom industry has expressed optimism that the committee’s actions will ease their operational challenges. They believe that eliminating multiple taxes will facilitate a smoother operation and prevent the need for varying tariffs across states.

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While many have applauded the move to reduce over-taxation, there is a call for more clarity on which taxes will be retained among the proposed 10. The concern is that a reduction in the number of taxes may not necessarily equate to a reduced tax burden, and further details on the specific taxes and their rates are needed. Additionally, it remains to be clarified whether the limit of 10 taxes applies across federal, state, and local governments.

In conclusion, the efforts to eliminate multiple taxation in Nigeria are a significant step toward improving the business environment, boosting economic growth, and reducing the tax burden on businesses and individuals. Clarity on the specific taxes to be retained will be essential to gauge the impact of this initiative fully.