The Nigerian government has vowed to expand the tax base by tracking tax evaders’ bank accounts, National Identity Numbers (NIN), and phone numbers, under the newly enacted tax laws.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who disclosed this late Thursday, June 26, a few hours after President Bola Tinubu signed the Tax law, said the government had already projected a revenue of N50 trillion from the tax law, amid dwindling oil revenue resources.
“As long as you are captured through banking, National Identity Number -NIN, bank information, and phone number, you cannot evade tax again in Nigeria once you’re eligible.
“With the phone number and necessary information about your financial dealings, the government can track anyone when you travel, buy land, build a house, or open an investment account with stock brokers. We’ll track all those activities,” Oyedele said.
According to Oyedele, the government seeks to get to a point where it would be virtually impossible for taxable Nigerians to evade tax or underpay their taxes.
The ICIR reported that the four bills signed into law were the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.
Now an Act, the Nigerian Tax Act aims to merge the country’s tax laws into a single, unified system, while the Nigerian Tax Administration Act creates uniform procedures for tax collection across federal, state, and local governments, replacing the current patchwork of different systems.
Oyedele clarified that under the new tax laws, Nigerian households earning ₦250,000 or less per month are classified as poor and exempt from paying taxes.
Oyedele, whom President Bola Tinubu appointed in July 2023, described his two-year stint as chair of the tax reform committee as both eventful and challenging.
He said that the objectives of the new laws, which would take effect from January 2026, were not intended to increase taxes but to stimulate economic activity in the country and track tax evaders.
He stated that the new laws would also protect businesses and ensure that the government doesn’t tax poverty, adding that the new laws “are efficiency-driven, growth-focused, and people-centric.
“This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor.”
He said nobody earning below ₦250,000 would have to pay taxes because they don’t even have enough.
“We have eliminated the tax component for people at the bottom, we have reduced it for people at the middle, and we have increased it slightly for people at the top.
“That middle, we estimated it at about ₦1.8 to ₦2 million a month. If you are earning that amount and below, your tax will not be zero, but it will reduce from what you are paying today,” he stated, noting that those who earn this amount are about five per cent of the total Nigerian population.
He said to arrive at a decision, his committee debated the poverty line of an average Nigerian.
His words, “We debated this question; we said: “Who is a poor person in Nigeria?
“First, we started with data like the World Bank and the UN will tell you two dollars, fifteen cents a day per person means you are at the poverty line but there are people who do not earn two dollars a day but they are not poor because they produce the food that they eat and they do not pay for transportation. I lived and grew up in the village.
“So, we had to factor that in. We drew our own (poverty) line for Nigeria based on an average of five people per family: two people working if they are lucky, taking care of the five.
“When we did the maths, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.
“We came up with ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes.”
Oyedele stated that Nigeria only got about 30 per cent of what it should be receiving in taxes, noting that the objective of the new tax laws was to close the 70 per cent gap.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.