Nigeria Sees Revenues Doubling Over Three Years on Tax Reforms

Ruth Olurounbi
·1-min read

(Bloomberg) -- Nigeria sees proposed changes in its tax laws helping to significantly boost revenues, as the West African nation seeks to control its widening deficit and borrowing costs.

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Taiwo Oyedele, the head of the government’s tax reform committee, said the reforms would lead revenue to “double within the next two to three years” as a share of gross domestic product. “If we are moving from 9% to 18%, that means we are doubling it,” he said Friday in an interview in Abuja, the capital.

President Bola Tinubu has sent proposals to lawmakers that would centralize tax collection and simplify the process by consolidating over 60 separate taxes and levies down to six.

Tinubu’s proposals will double value added tax to 15% over six years and reduce company tax to 25% from an average of 30% over the same period. He would also raise personal income tax to 25% on the nation’s high earners from next year, compared with about 20% at the moment.

The president says the reforms are needed to curb debt service costs, which consumed nearly all government revenue in 2023. Governors oppose the proposals out of concern the changes would crimp their powers and reduce the revenue they receive.

Oyedele said the government won’t back down, though elements of the plan could be tweaked.

“The worst case scenario is to drop the controversial issues,” he said. “There’s an outcome of it going ahead as proposed, or the one that goes ahead with modification, which is okay.”

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