Home Business 95% of informal sector should be exempted from paying taxes, says Taiwo Oyedele

95% of informal sector should be exempted from paying taxes, says Taiwo Oyedele

by Business News Report

Chairman Presidential Fiscal Policy and Tax Reforms Committee Taiwo Oyedele has said that at the committee’s closing session in Abuja that 95 per cent of informal sector of the nation’s economy should be exempted from paying taxes. The federal government is working on a system that will provide tax relief to 95 per cent of the informal sector of the country’s economy. He said this would be achieved by exempting businesses with annual turn over of N25 million a year or less from the various taxes hindering their progress over time. So, we think that 95 per cent of the informal sector should be legally exempt from all taxes: withholding tax, company income tax, and even payee taxes on their staff. We’re using data to inform our decisions. Currently, if you earn N25 million a year or less, you don’t have to pay company income tax; you don’t have to worry about VAT.

We think that the informal sector is people who are trying to earn a legitimate living; we should allow them to be and support them to grow to a point where they can then have the ability to pay taxes,” he said. Mr Oyedele said the proposed new reforms would focus on the top five per cent of that sector, the middle class and the elite, for taxes. He said the committee was drafting laws to effect the necessary changes in the country’s fiscal policy and tax reform ecosystem. According to the chairman, the new laws will ensure that reviews are sustained by all governments coming in. He added, “We don’t want this whole effort to go down the drain after one or two years.”

On compliance, he urged all stakeholders to fully cooperate with the government in implementing a new fiscal and tax policy that would benefit the general good of citizens. “We think that the days of being above the law in paying taxes are over. This is the same thing we’re saying to our leaders, whether they are elected or appointed. We think they have to lead by example by showing that they have paid the taxes, not only on time but correctly, to the lawful authorities as contained in the various laws,” he said.

He explained that some of the taxes Nigerians complained about were already in the constitution, which the committee had examined and called for review. Mr Oyedele said the committee report would be passed through the normal legislative process to give it full legal backing. ‘’So, our expectation is that as we progress from ideation, proposal, and implementation, you’ll see fewer and fewer of those issues, and then you’ll see harmony in the direction of the fiscal system. Not only in the number of taxes we collect, you will also see an improvement in how those monies are being spent. In terms of priority of spending, in terms of the efficiency of spending and in terms of focusing on what impacts on the lives of the majority of our population that live in multi-dimensional poverty,” he said. Mr Oyedele added that the committee had been working with the sub-nationals and the local government councils to harmonise the taxes to a single digit in the country.

‘’We think we can keep that within single digit across local government, state and federal government combined, and then improve the efficiency of collecting those taxes,” said Mr Oyedele. At the ceremony, Vice President Kashim Shettima restated President Bola Tinubu’s commitment to revitalise revenue generation in the country. Our aim remains the revitalisation of revenue generation in Nigeria while sustaining an investment-friendly and globally competitive business environment. Contrary to speculations in some quarters, we are not here to frustrate any sector of our economy but to create an administrative system that ensures the benefits of a thriving tax system for all our citizens,” he said. He said the dynamics of the nation’s fiscal landscape prompted the Tinubu administration to pause and reconsider the direction it was going. ”We shall provide the institutional framework to guarantee the adoption of the consensus of this committee, aligning them with our economic agenda,” Mr Shettima added. (NAN)

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