Taiwo Oyedele: Payment of taxes in foreign currency affecting naira, businesses

Taiwo Oyedele, chairman of the presidential fiscal policy and tax reforms committee, says Nigerian businesses are strained due to taxes paid in foreign currency.

Speaking at the Nigerian Financial Intelligence Unit (NFIU) first revenue assurance summit, Oyedele said businesses are required to pay certain taxes in dollars, which amounts to an estimated $3.5 billion annually.

According to Oyedele, the practice not only strains local businesses but also contributes to the depreciation of the naira.

“We found that Nigerian businesses are being asked to pay some taxes in dollars — NIMASA, NPA, etc. which amounts to an estimated $3.5 billion a year,” the chairman said.

“We are crying that our naira is losing value; why wouldn’t it lose value when we impose unnecessary dollar demands?”

In his address, titled “The Importance of Revenue Assurance in Economic Stability,” Oyedele noted that revenue should be used to enhance the lives and livelihoods of citizens rather than simply serving as a financial target.

He called for a coherent policy environment that fosters investment and collaboration among federal and state agencies.

‘FOCUS ON PROBLEM-SOLVING RATHER THAN OBSTRUCTING EFFORTS’

Addressing misinformation surrounding his committee’s initiatives, Oyedele criticised unfounded claims about fiscal policies, particularly a recent report alleging the committee announced a 10 percent reduction in federal government allocations from the federal account allocation committee (FAAC).

On October 13, Oyedele denied proposing a reduction in the federal government’s share of revenue from FAAC.

He said his committee’s recommendation was explicitly in respect of the value-added tax (VAT) revenue.

Speaking on the issue, the chairman urged stakeholders to focus on problem-solving rather than obstructing efforts to improve the economy.

‘EFFECTIVE COLLECTION OF TAXES WILL INCREASE REVENUES WITHIN 3 YEARS’

Oyedele announced that the committee has proposed a synchronised tax system that includes eight key taxes across federal, state, and local levels.

He said the effective collection of the taxes could result in a four- to five-fold increase in revenues within two to three years.

Additionally, Oyedele proposed a national framework for subsidies aimed at alleviating financial pressures on businesses, expressing hope that political leaders will adopt the reforms while calling for unity among stakeholders in implementing the reforms.

In her remarks, Hafsat Bakari, chief executive officer (CEO) of the NFIU, said while the unit’s work on tax crimes initially focused on supporting the Federal Inland Revenue Service (FIRS), NFIU has now expanded its efforts to partner with sub-national counterparts.

Bakari said most tax evasion occurs at the state level and that financial transaction data held by the NFIU would greatly benefit state internal revenue services.

“While FIUs were created by international conventions to address criminal activity, the same international conventions and standards require that we put in place measures to protect the integrity of the information that we provide,” Bakari said.

“To this end, our approach to working with States is built on the establishment of a memorandum of understanding which sets out the principles, objectives and limitations of the intelligence provided.”

She also announced the creation of the crime records information management system (CRIMS), a secure platform for requesting and receiving intelligence from the agency.

Bakari said through CRIMS, paper records, which are prone to compromise, have been eliminated.