Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has announced that if a new tax bill is passed by the National Assembly, wealthy Nigerians earning N100 million or more each month will be subject to a personal income tax rate of 25 percent.
This just as the World Bank called on the government to continue with the current reforms, and provide handsomely for the large segment of poor Nigerians bearing the brunt of the reforms.
These insights were shared during the 30th Nigeria Economic Summit held in Abuja on Monday.
Oyedele highlighted the importance of finding a middle ground that relieves tax pressures on low-income individuals while also ensuring that higher earners make a greater contribution to government finances.
He said, “If you earn N100 million a month, we’re taking up to 25 percent from the rich people. That’s because we need to balance the books.
“Today, whatever VAT you (businesses) pay on assets—whether you’re building a factory, buying a laptop, or vehicles—you bear it. This increases your cost, and therefore, your pricing will go up. Once our reforms are implemented, you get the credit back 100 percent on services and assets.”
The World Bank’s Senior Vice President and Chief Economist, Mr Indermit Gill highlighted that the welfare of the poor should be uppermost on the government’s mind.
He reminded the government that the problems that are being tackled today in the Nigerian economy first surfaced more than 40 years ago, when oil prices began collapsing in the early 1980s, after the big oil boom of the 1970s.
Gill urged the government to maintain the momentum of its current reforms for at least 10 – 15 years to achieve the desired results, stressing that Nigeria abandoned its 2003 – 2007 reforms that had placed it on a better stead for sustainable growth.
“The President’s signature reforms are essential. They are essential to break from the past and to chart a more hopeful course for all Nigerians. These include the unification of what used to be multiple exchange rates. They include allowing that unified exchange rate to be determined by the market. And, of course, they include the elimination of fuel subsidies”.
He said, “Nigeria’s need for jobs is immense. In the next 10 years, more than 12 million young Nigerians, both men and women, will enter the workforce generating jobs for them.
“It will only be facilitated by the private sector, and it will be facilitated by large-scale domestic and foreign private investment in the non-oil sector. Attracting such investment means boosting the national power grid, improving transportation, improving security, and improving the rules and regulations and enforcing them for private enterprise. So failure would set back reform efforts across the continent, besides ruining the future of yet another generation”.
He said before the reforms, the official exchange rate was roughly 465 Naira per dollar, and the freely determined parallel rate at that time was closer to N700, showing that for every dollar allocated at the official rate, the loss to the government was close to N250, every dollar.
“So the total loss in foregone federation revenues from oil, customs and taxes on imports amounted to 6.2 trillion Naira in 2022.
This was more than three percent of GDP. You can do a lot with three percent of 300 billion dollars,” he pointed out.
He said now the cost of subsidizing PMS and keeping its price below market levels amounted to N4.5 trillion in 2022.
“That was another two percent of GDP. You can do a lot with two percent of GDP, two percent of 300 billion dollars. Together, these two subsidies, the implicit one from the exchange rate and the explicit PMS subsidies amounted to a staggering 10 trillion Naira a year by 2022, or 15 billion dollars at the free market exchange rate,” Gill explained.
Meanwhile, President Bola Tinubu has called for increased cooperation among government agencies, the private sector and international partners to boost economic growth, enhance competitiveness and maintain stability in the country.
The President, who was represented by Vice President Kashim Shettima, addressed key economic challenges, detailing ongoing efforts to improve infrastructure, streamline regulations, and enhance the ease of doing business in Nigeria.
Tinubu outlined his administration’s Renewed Hope Agenda, designed to create an environment that fostered sustainable economic growth and shared prosperity.
“As a nation, we must prioritise economic diversification,” Tinubu stated, reaffirming his administration’s commitment to focus on sectors that could offer inclusive and sustainable growth, such as agriculture, manufacturing, and the digital economy.
“We are currently completing key infrastructure projects such as roads, railways, and power plants that will enhance connectivity and productivity.
“We are harmonising regulatory processes to reduce the bureaucratic hurdles that have long stifled entrepreneurship and innovation,” the President noted.
He also highlighted recent economic measures, including the removal of fuel subsidy and the unification of foreign exchange rates, as part of a broader strategy to stabilise the macroeconomic environment.
“These are all part of a broader effort to restore balance to the economy and ensure long-term stability,” he explained.
Addressing the critical issue of economic inclusivity, President Tinubu said, “Our competitiveness is not just about improving our standing on global indices.
“It is about ensuring that the Nigerian economy is inclusive—where small and medium-sized enterprises can thrive alongside large corporations, and where every citizen, regardless of location or background, can benefit from economic opportunities.”
The President assured that, “With the right policies, the right partnerships, and the right level of commitment, Nigeria can emerge stronger, more competitive, and more resilient than ever before.”
Earlier, Alhaji Atiku Bagudu, Minister of Budget and Economic Planning, reiterated the effectiveness of recent government reforms, stating that “there are significant pieces of evidence that reforms and investments are working.
“These governance and institutional reforms have helped to improve our macro-economic performance.
“Our GDP has been enhanced from 2.98 percent growth in first quarter of 2024 to 3.19 percent in quarter two of 2024, inflation is trending downwards while external reserves are improving.”
The minister also appealed for public support, saying, “We seek cooperation and understanding of the broad spectrum of the citizenry as there is indeed light at the end of the tunnel.”
Mr. Niyi Yusuf, Chairman of the Nigerian Economic Summit Group highlighted that high inflation, stagnant growth and unsustainable debt weighed heavily on the nation then, just as they do now.
He noted that Nigeria has experienced two recessions in the past decade, each exposing deep-rooted structural vulnerabilities that must be addressed with renewed urgency.
“Hence, today’s challenges demand a new approach centred on collaboration to promote growth, competitiveness, and stability. While our nation has made significant strides, our challenges are clear.
“The twin problems of income inequality and multidimensional poverty continue to cast a long shadow over our progress. Nigeria’s struggle with an uneven distribution of resources, macroeconomic instability, and institutional fragility prevents us from reaching our full potential. The task before us is to forge decisive reforms that can break these cycles of stagnation and pave the way for equitable growth. Since our recovery from the 2016 recession, the Nigerian economy has shown resilience but remains fragile,” he stated.