April 24, 2025

In September 2024, optimism surged when Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, announced plans to eliminate Value Added Tax (VAT) on public transportation. The news was widely welcomed—not only by everyday commuters, but also by advocates of tax justice and economic equity. The proposed VAT exemptions were expansive, covering not just transport but also essential items such as unprocessed and semi-processed foods, bread, rent, education, and healthcare. However, for Nigeria’s road transport workers, the financial burden may simply take a different shape. For years, the National Union of Road Transport Workers (NURTW)—commonly known as “the union”—has operated with considerable autonomy, imposing a variety of levies on drivers. Depending on the route and location, these charges can range from as little as ₦100 to as much as ₦3,000—or in extreme cases, even ₦20,000 per day. Informally referred to as “union tax,” these fees are often passed on to passengers, thereby undermining the very affordability that the VAT exemption seeks to promote. This creates a troubling cycle: passengers continue to pay inflated fares, while commercial drivers see their daily earnings eroded. Speaking at the BusinessDay Tax Reforms Conference on April 22, 2025, Taiwo Oyedele acknowledged the issue head-on. “We are also mindful of these informal taxes by state actors,” he said. “That process is still ongoing. It’s not something one level of government can resolve alone. We are engaging local governments, state governments, and the federal government as well.” His remarks underscore a crucial challenge: despite the progressive nature of the tax reform bill, it remains unlikely to dismantle the entrenched system of informal levies imposed by transport unions and local authorities. Oyedele also emphasized the need to rethink how taxation affects low-income earners and small-scale operators. He envisioned a more intelligent, accountable tax system—one that targets actual profits rather than mere visibility or activity. Using a relatable example, he posed a question: “Let’s say I run a logistics business with motorbikes—why are the bikes being stopped on the road and taxed? This is a business. Let me make my deliveries, calculate my profits, and then pay income tax accordingly.” His argument highlights a deeper flaw in current practices: taxing activity without considering actual income or profitability. This concern is shared by many in Nigeria’s informal economy, where visibility often attracts taxation more readily than verifiable earnings. In the public transport sector, this means those who are most visible—drivers, riders, and vendors—are often the most heavily taxed, regardless of their actual income levels. As Nigeria pushes forward with its tax reform agenda, the true measure of success will lie not in policy announcements, but in execution. While VAT exemptions on essential goods and services offer some immediate relief, dismantling the entrenched system of informal levies—particularly those enforced by powerful unions like the NURTW—will require consistent political commitment and deeper institutional reform. Until such change is realized, both commuters and drivers may continue to shoulder the weight of a system that, despite reforms, remains largely unchanged. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

In a strategic move to enhance financial standards and deepen sector-specific expertise within Nigeria’s evolving aviation industry, the Institute of Chartered Accountants of Nigeria (ICAN) has officially inaugurated its specialized Aviation Chapter. This newly established platform is designed to unite ICAN members with experience and interest in aviation finance, creating a dynamic space for professional development, peer engagement, and strategic advocacy. The creation of the Aviation Chapter highlights the growing acknowledgment of the sector’s unique financial challenges and significant growth potential. ICAN aims to address these complexities through a focused, collaborative approach. “By bringing together our members with specialized knowledge, we aim to contribute significantly to the sector’s sustainable development and ensure adherence to the highest standards of financial management and corporate governance,” said John Italume of ICAN in an official statement. The Aviation Chapter is set to drive impactful initiatives centered on professional development, hosting targeted workshops, seminars, and training sessions that delve into the specific financial intricacies of the aviation industry. It will also promote best practices, cutting-edge research, and real-world insights among finance professionals embedded in aviation, while working closely with regulators and policymakers to offer informed perspectives on economic and financial matters affecting the sector. This proactive engagement is expected to support policy development that fosters long-term stability and sustainable growth in aviation. The chapter’s interim leadership includes distinguished chartered accountants with extensive backgrounds in aviation finance, airport operations, and strategic oversight. Ayodele Olatiregun will serve as the Pioneer Chairman, heading a team of accomplished executives and seasoned professionals from across Nigeria’s aviation landscape. The official launch event is slated for Tuesday, April 22, 2025, at the Victoria Garden Conference and Event Centre in Agidingbi, Ikeja, Lagos. The event is set to gather key stakeholders, including finance experts, aviation regulators, and top government officials, in a celebration of collaboration and forward-thinking leadership. With this initiative, ICAN is laying the groundwork for a more transparent, accountable, and resilient aviation sector. The Aviation Chapter stands as a beacon of progress—one that seeks to uplift the entire ecosystem by aligning financial best practices with the operational demands of a complex and rapidly growing industry. The integration of finance professionals into the heart of aviation decision-making has the potential to improve organizational performance, boost public trust, and enhance the overall efficiency of air travel in Nigeria—delivering benefits that ripple across businesses, individuals, and the national economy. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federal Inland Revenue Service (FIRS) has rolled out an ambitious recruitment initiative aimed at boosting its in-house workforce to 80% by the end of the current administration. This strategic move is designed to reduce dependence on external consultants and foster a more capable, self-reliant institution. A Key Pillar of the 2025 Strategic Roadmap This recruitment effort is a cornerstone of the FIRS 2025 Strategic Roadmap, which focuses on three core pillars: people, innovation, and operational excellence. By prioritizing internal capacity building, FIRS aims to improve service delivery, enhance institutional continuity, and cut operational costs. Diverse Opportunities Across Departments FIRS is opening up a wide range of positions in areas including: Transparent and Merit-Based Selection In line with its commitment to fairness and professionalism, the recruitment process will be guided by transparency and merit. A dedicated leadership team comprising senior FIRS officials will oversee the entire process to ensure integrity and accountability. Commitment to Employee Development Successful candidates can look forward to: These initiatives aim to nurture talent, foster a culture of learning, and equip employees with the tools they need to thrive in their roles. Join the Transformation This recruitment drive marks a significant shift towards institutional self-sufficiency and long-term sustainability. FIRS is calling on qualified and passionate individuals to apply and be part of this transformative journey. Ready to make a difference?Explore available opportunities and take the first step towards a fulfilling career with FIRS. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Finance Minister Enoch Godongwana has defended the government’s decision to raise the Value Added Tax (VAT) rate by 0.5%, arguing that delaying or suspending the increase would have “severe and far-reaching” consequences for South Africa’s economy. In an affidavit submitted to the Western Cape Division of the High Court, Godongwana responded to legal challenges from the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF), both of which are seeking to block the VAT increase scheduled to take effect on May 1. He maintained that their applications lack merit. Godongwana warned that stopping the VAT hike would result in a R13.5 billion revenue shortfall, forcing the state to either slash spending or borrow more—both of which, he said, carry significant risks. “Government would be forced to cut spending or increase borrowing. Spending cuts would likely impact essential services like education, healthcare, housing, and social protection programmes, which would disproportionately harm the poor and vulnerable,” Godongwana stated. The DA is also contesting the constitutionality of section 7(4) of the VAT Act, which permits the finance minister to temporarily adjust the VAT rate. However, Godongwana argued that the DA’s interpretation is flawed. “This section does not allow the Finance Minister to amend section 7(1) of the Act. It merely provides temporary, conditional authority to adjust the VAT rate for up to 12 months, subject to Parliament’s legislative powers,” he clarified. He also dismissed the EFF’s legal bid as vague and unsupported, questioning whether the party aimed to interdict the National Treasury’s report referencing the VAT hike, or the hike itself. Godongwana emphasized that Parliament would still debate and vote on the proposed VAT increase, expressing confidence that it would pass as a necessary and responsible fiscal measure. “While tax increases are politically challenging, I believe Parliament will recognize this step as fiscally prudent when the proposed amendment is debated,” he said. He urged the court to reject the applications for an interim interdict, stating that the applicants have alternative remedies and that the balance of convenience leans heavily against halting the tax increase. “The DA still has recourse through Part B of its motion and may request appropriate relief if successful. There’s no justification for interim relief at this stage,” he argued. The court is expected to hear arguments from both parties on Tuesday. The ruling will determine whether the VAT increase proceeds as scheduled or is put on hold pending further judicial review. Both the DA and EFF are also challenging the adoption of the 2025 Fiscal Framework and Revenue Proposals, claiming that the legislative processes followed by the National Assembly and National Council of Provinces were fundamentally flawed and unlawful. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.