More than 90% of Nigeria’s informal sector operators lack the financial capacity to pay taxes, according to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee.
This was stated during an interactive session with journalists, influencers, and public analysts on the new tax laws.
The majority of operators in the informal sector are engaged in survival activities, such as roadside corn sellers, vulcanizers, and wheelbarrow pushers, who remain poor despite a steady stream of customers. Oyedele noted that these individuals are merely trying to survive, and therefore, have no capacity to pay taxes.
“We should not tax seeds but wait for the fruits,” Oyedele said, aligning with President Bola Tinubu’s principle that poverty and capital should not be taxed. This stance is reflected in the new tax laws, which aim to make tax evasion more expensive for all parties involved.
The new tax laws introduce stricter accountability measures and heavier penalties for evasion. Oyedele emphasized that the reforms will improve the transparency and accountability in tax administration, with all revenues going directly into the federation account.
The Federal Inland Revenue Service (FIRS) collected over ₦20 trillion in taxes last year and is on track to surpass that figure this year. This is thanks to the reforms that have improved efficiency and transparency.
The tax reforms are a step towards promoting fairness and equity in the tax system. By making tax evasion more expensive, the government hopes to encourage compliance and increase revenue.