TAX SERVICES

The National Assembly is poised to pass the long-anticipated harmonised tax reform bills, with a final decision expected by Tuesday, following the resolution of all previously disputed provisions. This legislative breakthrough represents a major advancement in the Federal Government’s drive to modernise Nigeria’s tax regime and align it with global standards. Hon. James Faleke, Chairman of the House Committee on Finance, announced the development on Sunday via his official X (formerly Twitter) handle. He confirmed that the joint Conference Committee—comprising members from both the Senate and the House of Representatives—had completed its review after thorough deliberations. “The Conference Committee on the Tax Reform Bills has successfully concluded its assignment,” Faleke stated. “Every clause of the four bills was carefully examined, and all grey areas were addressed and resolved.” Faleke, who led the House delegation during the harmonisation process, praised the dedication of committee members, noting that discussions often extended late into the night. The intensive review sessions reportedly ran through Thursday night, continued all day Friday, and concluded in the early hours of Saturday. With the harmonisation process complete, the tax bills are now ready for final presentation before both chambers of the National Assembly and subsequent transmission to President Bola Ahmed Tinubu for assent. Faleke also expressed gratitude to the Senate delegation, particularly commending Senator Sani Musa, Chairman of the Senate Committee on Finance, for his leadership. “I want to especially appreciate Senator Sani Musa and the Senate Conference Committee for their commitment. I also sincerely thank my colleagues on the House Committee, whom I was privileged to lead, for their dedication to the Nigerian people,” he said. The tax reform initiative, driven by the Tinubu administration, seeks to overhaul Nigeria’s outdated tax system. The reforms aim to enhance transparency, expand the tax base, increase government revenue, and support key national development goals. Senate President Godswill Akpabio previously praised lawmakers for their efforts in advancing tax reforms that will bring Nigeria closer to international best practices. “These executive bills are designed to transform and modernise Nigeria’s tax structure,” Akpabio said during a plenary session where a majority voice vote favored the bills. Senator Sani Musa, who led the ad hoc committee on the tax reform initiative, emphasized that the reforms are structured to improve revenue generation and fund essential national priorities. These include defence infrastructure, cybersecurity, educational funding through TETFund, and welfare for military personnel engaged in peacekeeping operations. The reform package also proposes the establishment of a tax ombudsman to resolve disputes and promote fairness in tax administration, along with a dedicated tax tribunal to streamline the resolution of tax-related grievances. Senator Musa noted that the reforms span various tax categories, including Value Added Tax (VAT), development levies, and inheritance tax—some of which were previously excluded but reintroduced during harmonisation. He expressed confidence in the positive impact of the reforms: “I am confident that Nigerians will see meaningful benefits from these changes. We also commend President Tinubu for ensuring a fair and open legislative process.” Once passed and signed into law, the harmonised tax bills are expected to lay the groundwork for a more equitable, transparent, and development-oriented tax system in Nigeria. 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.

Mrs. Folorunso Alakija, the Group Managing Director of Rose of Sharon Group and Executive Vice Chairman of Famfa Oil, has expressed concern over the federal government’s proposed increase in Value Added Tax (VAT) from the current 5% to 7.5%. She voiced her concerns during an interview with THISDAY at the graduation ceremony of 67 students from the Folorunso Alakija Skills Acquisition Centre, located within the College of Technology, Yaba, Lagos. According to her, “Raising VAT would make it more challenging for entrepreneurs to achieve their desired level of profitability. “However, tax is essential for nation-building, as it represents a significant source of income for the government. No government can function effectively without tax revenue—provided that the funds are reinvested into critical sectors and are not misused.” Addressing the broader challenges entrepreneurs face in Nigeria, Alakija identified unreliable electricity as the most pressing issue. She stated, “In my opinion, the primary obstacle for Nigerian entrepreneurs is electricity, not funding. We’ve seen individuals, including women, start businesses with as little as N1,000 and grow them into multi-million-naira enterprises. This proves that while capital is important, electricity is vital. “There are very few businesses that don’t rely on power. We all need electricity. The federal government must prioritize solving this issue—whatever it takes. It’s critical for our economy. “When foreign investors consider where to invest, the availability of stable electricity is a major factor. The lack of it is a deterrent. The government must take urgent action.” Commenting on the impact of her skill acquisition centre, she emphasized the value of the opportunity given to the graduates. “This opportunity is a blessing from God,” she said. “Many people pray for such a chance but never receive it. These graduates are fortunate and must make the most of it by applying what they’ve learned. “This is their path to financial independence—to support themselves and their families. They must not take it lightly. Just because it was given to them easily doesn’t mean they should waste it.” 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.

Introduction Nigeria continues to grapple with persistent fiscal challenges—ranging from recurring revenue shortfalls and mounting debt obligations to surging inflation, which reached over 32% in 2024. These pressures have consistently widened the country’s budget deficits, even as government spending has increased to tackle urgent national needs such as infrastructure, economic recovery, and social welfare. Although the Federal Government has ramped up allocations to critical sectors, fiscal performance remains strained. A major factor is Nigeria’s relatively low tax-to-GDP ratio, which stood at approximately 10.3% in 2024—an improvement from previous years but still below the African average of 15.6% and the global average of 19%. In response, the government has set a target of increasing this ratio to 18% by 2026 through comprehensive tax reforms aimed at boosting compliance, widening the tax base, and reducing reliance on borrowing. Taxation remains a cornerstone for addressing Nigeria’s fiscal and budgetary challenges. In 2023, President Bola Tinubu inaugurated the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele. The committee was tasked with overhauling the fiscal system to enhance revenue mobilization from both tax and non-tax sources. Notably, the committee aims to raise the tax-to-GDP ratio without introducing new taxes or increasing existing rates. Instead, reforms will focus on streamlining taxes, improving collection efficiency, and alleviating the compliance burden on businesses and individuals. FIRS Revenue Performance (2020–2024)Over the past five years, the Federal Inland Revenue Service (FIRS) has significantly improved its revenue collection efforts, despite economic headwinds including the COVID-19 pandemic, inflation, and rising debt. 2020: ₦5.26 trillion collected—surpassing targets despite pandemic disruptions. 2021: ₦6.4 trillion collected, bolstered by digital tools like the TaxPro Max platform. 2022: Record-breaking ₦10.1 trillion, driven by Companies Income Tax, VAT, and stamp duties. 2023: ₦12.3 trillion collected due to enhanced data management and sector-specific strategies. 2024: FIRS exceeded its ₦19.4 trillion target by collecting ₦21.6 trillion—a 112% performance rate and a 76% increase from 2023. The FIRS attributes this success to internal reforms, stakeholder collaboration, and workforce commitment. However, it’s crucial to acknowledge external influences, such as the deregulation of the exchange rate regime and high inflation, which have inflated nominal revenue figures. As such, Nigeria must adopt inflation-adjusted strategies to ensure the long-term sustainability and real value of its revenue gains. Revenue Performance vs. Budget Deficits (2020–2024)Despite FIRS’s commendable performance, Nigeria’s budget deficit remains a significant concern. From 2020 to 2024, national budgets expanded steadily, but expenditures have consistently outpaced revenues. 2022: With a ₦17.1 trillion budget, the deficit surged to ₦7 trillion. 2024: A ₦49.74 trillion budget projected a deficit of ₦13.39 trillion. The core issue lies in Nigeria’s continued dependence on oil revenues and an expanding expenditure base. While improved tax collection has helped, it has not been sufficient to close the gap. To achieve fiscal sustainability, Nigeria must diversify its revenue sources, reduce structural inefficiencies, and deepen non-oil revenue mobilization. Charting a Sustainable Path ForwardThe proposed Nigerian Tax Bill (NTB) represents a critical reform designed to improve compliance, enhance the ease of doing business, and expand government revenue without imposing new taxes. Key elements include: Simplification: Streamlining the tax system and eliminating redundancies. Compliance: Encouraging voluntary compliance and reducing disputes through clearer legal provisions. Inclusivity: Expanding the tax net to include previously untaxed activities, particularly in the informal and digital economies. Modernization: Leveraging technology to improve monitoring and enforcement, particularly for non-resident companies and digital services. Investment climate: Reducing administrative burdens to attract both local and foreign investors. The bill is a significant step toward achieving the government’s 18% tax-to-GDP target by 2026. However, its success hinges on effective implementation, institutional reform, and stronger fiscal discipline. ConclusionNigeria stands at a critical juncture in its fiscal journey. While recent gains in tax collection are encouraging, long-term economic stability requires comprehensive reforms that go beyond revenue targets. The Nigerian Tax Bill, coupled with strategic fiscal planning and diversification efforts, can help bridge the deficit gap, ensure financial sustainability, and drive inclusive national development. 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.

Real estate stakeholders have expressed optimism that once the Tax Reform Bill is enacted, real estate transactions will be exempt from Value Added Tax (VAT). This assurance was further reinforced by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who stated that the bill is designed to benefit low-income earners and help bridge the country’s housing deficit. According to Oyedele, the VAT exemption is expected to reduce the cost of building materials and overall housing expenses. He emphasized that the bill, contrary to some misconceptions, is structured to ease the financial burden on low-income households. He noted, “There will be no VAT on land transactions, real estate sales, and rent, which have previously been contentious issues.” Oyedele made these remarks during a Building and Construction Industry Forum co-hosted by the Council of Registered Builders of Nigeria (CORBON) and the Housing Development Advocacy Network (HDAN). Themed “Nigeria’s Tax Reforms and the Building and Construction Industry: Implications and Opportunities,” the event served as a platform to clarify the bill’s broader benefits. Oyedele expressed concern that the reform is being misinterpreted by some individuals. He also highlighted other provisions in the bill, including stamp duty exemptions for rents below ₦10 million per month and capital gains tax waivers on the sale of residential homes. Additionally, he said that producers of building materials, especially non-metallic products, will be eligible for priority sector incentives to boost local production. He assured stakeholders that land transactions, titling processes, and property tax harmonization will be improved under the reforms. “The Tax Reform Bill aims to make housing more affordable and ease the tax burden for renters,” Oyedele explained. “Ultimately, the reforms are designed to improve the quality of life, stimulate the construction sector, and enhance overall economic activity.” He urged Nigerians to seek accurate information about the reforms rather than relying on misleading headlines or social media narratives. Speaking at the event, the Minister of Housing and Urban Development, Ahmed Dangiwa—represented by Temitope Gbemi, Director of Public Buildings—affirmed that the bill offers significant relief to construction companies and contractors. He added that the ministry is aligning its housing policies with fiscal reforms, collaborating with tax authorities to ensure that real estate investments are governed by transparency, fairness, and investor protection. CORBON Chairman, Samson Opaluwah, pointed to limited access to finance and multiple taxation as key challenges impeding the council’s growth. He expressed hope that the bill would address these issues effectively. Meanwhile, HDAN Executive Director, Festus Adebayo, welcomed the VAT exemptions on land, real estate, and building materials. He called for additional incentives in the bill to attract developers and investors to build affordable housing for low-income earners. 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 Institute of Chartered Accountants of Nigeria (ICAN) has recently taken a significant step to reinforce the importance of strict adherence to ethical standards within the accounting profession. This was clearly emphasized during the inauguration of the Ako Jaya District Society, an event that marks a crucial milestone in bridging the gap between ICAN’s national body and its members across Nigeria. At the inauguration, Mrs. Florence Akinsola, the pioneer district chairman, passionately urged all members to continuously uphold the core values that define the institute: integrity, accountability, and excellence. These values are not just ideals but essential principles that guide the professional conduct of accountants in every sector.The president of ICAN further highlighted the indispensable role accountants play as gatekeepers of the nation’s economy. According to him, every organization that aims to thrive and sustain its operations must have competent accountants who can provide sound financial guidance. Accountants help ensure that organizations do not exhaust their resources prematurely and maintain financial sustainability over time. In addition to technical competence, ICAN stressed the need for accountants to be morally upright, emphasizing qualities such as honesty, independence, and objectivity. These ethical standards must be upheld even when faced with high stakes or pressure, ensuring that the profession maintains its credibility and trustworthiness.To maintain these standards, ICAN has established a disciplinary framework whereby any reported infractions by members are thoroughly investigated. Cases that show probable violations are referred to the accountant disciplinary tribunal, ensuring accountability and reinforcing the institute’s commitment to ethical conduct. Beyond professional ethics, ICAN is also actively engaging with communities through initiatives such as setting up libraries and educational programs aimed at nurturing young talent interested in accounting. These efforts are designed to expand the institute’s presence and influence, making accounting a more accessible and respected profession across Nigeria. For tax consulting firms, this renewed focus on ethics and professionalism by ICAN serves as a critical reminder of the vital role accountants play in safeguarding financial integrity. Upholding these ethical standards not only protects clients but also enhances the reputation and sustainability of consulting practices. As the financial landscape grows increasingly complex, tax consultants must align themselves with these principles to provide trustworthy, objective, and high-quality services that clients can rely on. 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.

Change is a constant feature of national development, and reforms—whether in taxation, fiscal policy, monetary systems, banking, agriculture, healthcare, education, or information and communication technology—are essential components of progress. What remains crucial is our collective ability to evaluate these reforms with objectivity and optimism. This article, in that light, explores Nigeria’s tax reform system from the perspective of students and practitioners, shedding light on both the potential benefits and the challenges that inevitably accompany transformative change. Nigeria’s history of tax reform can be broadly divided into two phases: the pre-independence and post-independence eras. Prior to 1960, revenue collection was largely handled by local institutions on behalf of governing authorities. The colonial administration began formalising these processes through laws such as the Native Revenue Ordinance of 1917 and the Direct Taxation Ordinance of 1940. These early initiatives laid the foundation for a more organized taxation system. Following independence in 1960, Nigeria embarked on a series of tax reforms aimed at modernizing and strengthening the tax structure. The 1978 reform introduced withholding tax and restructured income tax, enhancing the reliability of revenue collection. In 1993, the Value Added Tax (VAT) replaced the outdated Sales Tax Act of 1986, marking a shift towards consumption-based taxation. The National Tax Policy introduced in 2012 focused on creating a unified tax administration, while the 2017 review aimed to encourage voluntary compliance, widen the tax base, and address revenue leakages. A significant advancement came with the 2020 Finance Act, which raised VAT from 5% to 7.5% and introduced incentives for small businesses. Most notably, the 2023 establishment of the Presidential Fiscal Policy and Tax Reform Committee marked a bold step toward overhauling the nation’s fiscal system. The committee focused on harmonizing multiple levies, improving tax collection efficiency, and developing a unified revenue framework. This led to the formulation of four pivotal bills: the Nigerian Tax Bill, Nigerian Tax Administration Bill, Nigerian Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. At its core, tax reform involves the strategic restructuring of tax laws, collection methods, and administrative frameworks. The primary goals include enhancing administrative efficiency, broadening the revenue base without overburdening taxpayers, updating outdated regulations, simplifying compliance, promoting economic growth, and aligning with global best practices. Effective reform strategies include improving tax administration, making prudent adjustments to tax rates, enacting taxpayer-friendly laws, and expanding the tax net. For both students and professionals, tax reforms present numerous opportunities. Increased government revenue can enhance the operational capabilities and payroll structures of public institutions where many professionals are employed. Moreover, reforms create demand for skilled tax administrators and analysts, offering employment opportunities to students and professionals alike. A more transparent and efficient tax system also fosters investor confidence, driving foreign direct investment and stimulating economic growth that benefits the wider population. Reforms also promote academic and professional development. Students and researchers gain new areas for inquiry, while practitioners must continually update their skills to keep pace with evolving tax policies. The 2023 reform, for instance, included a provision mandating the Tertiary Education Trust Fund (TETFund) to allocate 30% of its revenue to the Nigerian Education Loan Fund (NELFUND). Established under the Student Loans Act signed on June 12, 2023, by President Bola Ahmed Tinubu, NELFUND is tasked with administering student loans in Nigeria and is a direct product of recent tax policy changes. Beyond individual benefits, tax reform contributes to broader national objectives such as fiscal stability, equitable wealth distribution, and sustainable economic development. However, these reforms are not without obstacles. One major concern is the potential increase in tax rates, which may reduce disposable income for individuals, including students and professionals. Resistance to change, driven by limited understanding or fear of complexity, is another challenge. A shortage of qualified personnel to implement reforms effectively, combined with low public awareness, can hinder the process. Without adequate training and communication, both students and practitioners may struggle to engage with the new tax landscape. Additionally, legal and administrative complexities may delay implementation or create confusion, thereby affecting compliance. Despite these challenges, the importance of tax reform cannot be overstated. For Nigerian students and professionals, it represents both a challenge and an opportunity—a call to become more informed, engaged, and forward-thinking. With proper education, increased awareness, and robust institutional support, the long-term advantages of tax reform can significantly outweigh the difficulties. 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.

Let’s talk about taxes. Yes, those taxes. The ones that make your eyes glaze over when you hear words like “deductions,” “withholding,” or “audit.” But stay with me — because taxes might be more important to your life than you think, and they’re definitely not the villain we love to hate. What Are Taxes, Really? At their core, taxes are the price we pay to live in a functioning society. Roads? Paid by taxes. Schools? Taxes. Emergency services, trash pickup, clean water, even public parks — all of it, funded by our collective contributions. But we rarely feel that connection. All we usually see is money leaving our paycheck. Why Taxes Feel So Frustrating Most of us aren’t taught how taxes work. We enter adulthood and suddenly we’re expected to know how to file returns, understand brackets, and claim dependents — all without a manual. It’s overwhelming. And because we don’t always see the impact of where our money goes, we start to resent it. But Here’s a Thought: What If We Shifted the Narrative? Imagine treating taxes not as a punishment, but as a responsibility. Like voting, or helping a neighbor. What if, instead of dreading tax season, we approached it like an annual check-in with ourselves: What You Can Control You may not be able to control how much the government takes, but you can: Taxes Aren’t the Enemy — Misinformation Is You don’t have to love paying taxes. But understanding them is a power move. It means fewer surprises, better financial choices, and a little less stress come April. So next time tax season rolls around, don’t panic. Get curious. Ask questions. Maybe even hire help. Because the more you know, the more you can make the system work for you — instead of feeling like it’s always working against you. 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.

Taxation is a fundamental pillar of economic development. It provides governments with the revenue needed to fund public services, build infrastructure, and support social programs. In Nigeria, the 2017 National Tax Policy (NTP) was introduced as a strategic framework to reform and guide the country’s tax system, aligning it with national economic goals. The policy envisions a system that encourages voluntary compliance, guarantees consistent revenue, and drives sustainable development. However, the lofty ambitions of the NTP have not translated into reality. There remains a troubling disconnect between policy formulation and its actual implementation, undermining the role taxation should play in Nigeria’s development journey. Without addressing this gap, the potential of the tax system to significantly contribute to national progress will remain largely untapped. One of the primary challenges is the fragmented distribution of taxing powers across different levels of government. While some are clearly outlined in the constitution, others remain vague, leading to conflicts and legal battles—most notably over the administration of Value Added Tax (VAT). This confusion, combined with a proliferation of taxes across states, has made the system inefficient and burdensome. The proliferation of taxes stems from states grappling with an imbalance between their fiscal responsibilities and taxing authority. To make up for this, many introduce overlapping taxes, especially on property and income, further complicating compliance. As a result, taxpayers often seek ways to legally minimize (avoidance) or completely evade taxes—shifting the burden onto more compliant citizens and weakening the tax base. Compounding the issue is the absence of reliable demographic data. How can the government tax people it cannot identify? Despite over a century of organized taxation in Nigeria, there’s still a major gap in citizen data collection, analysis, and management. This lack of accurate information makes effective tax planning and implementation nearly impossible. Political interference only worsens the situation. Many public officials and lawmakers lack a deep understanding of the tax system and often prioritize political interests over technical efficiency. This, coupled with entrenched corruption, weakens enforcement and erodes public trust. A system riddled with political favoritism and vested interests can never function at its full potential. Another major barrier is the complexity of the tax laws themselves. Many are outdated, ambiguous, or too technical for the average citizen to understand. This not only creates confusion but also fuels resistance and non-compliance. The lack of public awareness campaigns and tax education further alienates taxpayers, leading to widespread reliance on arbitrary assessments rather than structured compliance. There’s also little incentive for subnational governments to improve tax collection. The formula for revenue allocation in Nigeria places minimal emphasis on internal revenue generation, instead focusing on criteria like landmass, population, and social needs. This discourages innovation and effort in improving local tax systems and leaves governments dependent on unstable oil revenues. To move forward, Nigeria must implement real and lasting reforms. A constitutional amendment to clearly delineate taxing powers and grant more fiscal autonomy to states and local governments is essential. This will not only reduce friction but also foster accountability at all levels. Updating and simplifying tax laws is another crucial step. The recent establishment of the Fiscal Policy and Tax Reforms Committee by President Tinubu, under the leadership of Taiwo Oyedele, is a commendable move. The committee’s mandate to propose reforms aimed at streamlining tax administration and aligning it with current realities is a necessary intervention. The modernization of the tax system is long overdue. Leveraging technology, training tax officials, and adopting global best practices will significantly improve efficiency. Initiatives like the Integrated Tax Administration System (ITAS), which digitizes tax processes, are steps in the right direction and should be expanded. Widening the tax net through mandatory registration—such as requiring Tax Identification Numbers (TIN) for specific transactions—has already begun to yield results. This strategy not only increases transparency but also brings more individuals and businesses into the formal economy, ensuring they contribute their fair share. Finally, the government must demonstrate that taxes are being put to good use. When citizens see tangible improvements in infrastructure, education, healthcare, and security, they are more likely to comply voluntarily. Transparency, accountability, and visible impact are the strongest tools for encouraging compliance and building trust. In conclusion, Nigeria’s economic potential is immense—like a forest full of ripe fruit. But without a tax system that works, this potential remains largely unharvested. The time has come for the country to close the gap between tax policy and implementation and unlock the full power of taxation as a driver of national development. 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.

Nigeria may reinstate a 5% excise tax on telecom services, as proposed in the 2024 Finance Bill passed by the Senate last week. The tax would apply to data and voice services. Initially introduced in 2020 under former President Buhari to broaden the tax base, the levy was suspended in 2023 by President Bola Tinubu in response to soaring inflation. However, with mounting fiscal pressures, the government is now revisiting the policy. Telecom operators warn that reintroducing the tax would increase service costs and hinder efforts to bridge Nigeria’s digital divide, with over 40% of the population still lacking internet access. Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), criticized the proposal for its lack of clarity and potential impact on consumers. “We’ve received no details on how this 5% tax would be implemented, but it’s clear the burden will fall on users. Telecom services should be treated as essential infrastructure, not taxed like luxury goods. No serious economy taxes telecoms in this manner,” Adebayo said. ALTON also highlighted that telecom operators already face 54 different taxes across Nigeria. The Nigerian Communications Commission (NCC) has yet to receive the official bill for review. Industry analysts warn that the tax could discourage investment in digital infrastructure, threatening recent sector gains. MTN Nigeria reported a Q1 2025 profit of ₦133.7 billion ($83.3 million), while Airtel Africa announced a pre-tax profit of $661 million for its financial year ending March 2025. With internet access increasingly vital for education, healthcare, and employment, experts argue that higher telecom costs risk deepening Nigeria’s digital divide. They advocate for long-term strategies focused on investment and connectivity rather than short-term tax fixes. 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.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has revealed that Nigeria collects only 30% of its potential tax revenue—leaving a massive 70% shortfall, among the highest globally. Speaking on the theme “Taxation for Development: Policies, Law and Implementation” at the 27th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja, Oyedele highlighted deep-seated inefficiencies in the country’s tax system. He pointed to policy loopholes, rampant abuse of waivers and incentives, and weak enforcement as primary contributors to the revenue gap. He emphasized that significant losses stem from the misuse of import waivers and duties, arguing that no taxpayer should receive deductions or allowances on imported goods without first paying the associated duties. To tackle these challenges, Oyedele advocated for the deployment of advanced tax technologies capable of real-time monitoring. He noted that intelligent systems can track inventory, monitor sales, detect inconsistencies, and uncover evasion—particularly when there’s a mismatch between reported income and lavish lifestyles, such as frequent international travel or luxury spending. He expressed concern that while a few exploit the system for personal gain, millions of Nigerians bear an unfair tax burden. He disclosed that some of the country’s largest companies—especially in the oil and gas sector—face paper tax rates as high as 85%, yet many have paid little or nothing over the past decade due to aggressive tax planning and unchecked incentives. Oyedele questioned the ethics of making billions while contributing nothing to the public purse, insisting that all entities must shoulder their fair share of the tax responsibility. He also criticized the role some tax professionals play in enabling evasion. According to him, certain agents lack the necessary technical knowledge and ethical standards, with some even selling confidential tax strategies to the highest bidder—a practice he warned could destabilize Nigeria’s fiscal health. To address this, Oyedele proposed a comprehensive regulatory framework for tax practitioners. This would require all tax agents to be accredited, demonstrate competence and ethical integrity, and register officially. Agents would need to prove personal tax compliance and ensure a verifiable connection between themselves and every filing they handle. He stressed that practitioners who mislead clients—for example, by falsely claiming that VAT and withholding tax offset each other—would face sanctions such as suspension or disqualification. Oyedele further recommended that every business, regardless of size, should appoint a designated tax representative. Drawing from international best practices in the U.S., Australia, Malaysia, and South Africa, he noted that these countries not only regulate individual practitioners but also oversee the professional bodies that certify them. Although he acknowledged that reform efforts may face pushback, he asserted that Nigeria’s fiscal survival hinges on eliminating leakages and ensuring transparency across the board. Supporting Oyedele’s call, Abimbola Oyelola, Chief Economist and Group Head of Research at the Bank of Industry (BoI), urged stakeholders to move beyond skepticism and actively engage in the reform process. Representing BoI’s Managing Director, Olusupo Olusi, Oyelola emphasized that reform success depends on collective participation and an informed public. “The best way to predict the future is to operate it—not just complain about it,” he stated. Oyelola reiterated BoI’s commitment to Nigeria’s industrial transformation through financial and advisory support for businesses. This, he explained, will help build enterprise capacity and drive sustainable national development. Oyedele also sought to dispel common misconceptions around Nigeria’s Value Added Tax (VAT), currently at 7.5%. Many small business owners, he said, wrongly assume they must pay VAT out of pocket, when in fact, the tax is borne by the end consumer. He noted that enrolling in the VAT system could offer financial benefits for SMEs and professionals through input tax credits. Despite criticisms, he pointed out that most consumer goods are either VAT-exempt or zero-rated, easing the burden on low-income households. While acknowledging that Nigeria may eventually need to raise the VAT rate—possibly to 15%—he stressed that any such move must be paired with measures to protect vulnerable groups. For now, the government has opted to keep the rate at 7.5%. On broader reforms, Oyedele emphasized the urgent need to boost personal income tax compliance. Efforts are ongoing in collaboration with the Joint Tax Board and state tax authorities to simplify the system and improve transparency. He lamented that many tax officers operate without adequate data on taxpayer behavior, making the system reactive rather than proactive. For long-term improvement, he argued that trust—not fear—must drive compliance, with tax payment viewed as a civic duty, not a penalty. He also flagged the need for Nigeria’s VAT system to remain regionally competitive, warning that significant rate disparities across West Africa could fuel transshipment and abuse. Looking ahead, Oyelola shared the BoI’s efforts to support innovation and entrepreneurship, particularly through tech hubs and digital platforms. Young Nigerians, he said, are already proposing creative solutions to decentralize development. BoI currently operates five tech hubs in two major cities, with plans to expand nationwide in the coming year. In conclusion, he called on all Nigerians—citizens, business leaders, and professionals—to take ownership of the tax reform process. “Paying tax should not be a source of fear, but a badge of trust,” he said. “It’s no longer enough to critique; we must participate.” 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.