Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that the country can no longer depend largely on borrowing to finance development, stressing the need for a sustainable fiscal system capable of supporting key sectors of the economy.
Speaking on Tuesday at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria in Abuja, Oyedele said Nigeria must urgently strengthen its revenue base through comprehensive tax reforms that promote growth, fairness and investment.
According to the minister, continued reliance on debt to fund infrastructure, healthcare, education, security and social protection is no longer sustainable.
“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection,” he said.
His comments came a day after reports emerged that the federal government had intensified discussions with the World Bank over a proposed $1.25bn loan aimed at supporting economic reforms, job creation and competitiveness.
Oyedele explained that the government’s ongoing tax reforms were designed to address long-standing structural weaknesses in Nigeria’s tax system, including multiple taxation, fragmented administration, poor compliance and overreliance on a narrow revenue base.
He said businesses across the country had struggled with overlapping taxes, inconsistent enforcement and high compliance costs, while many citizens viewed the system as unfair because tax burdens were unevenly distributed.
“The situation became unsustainable because government revenues remained inadequate to meet the country’s development needs,” he noted.
The minister said the reforms were focused on creating a stronger fiscal foundation for long-term development rather than introducing policies for political convenience.
“Our approach is guided by a simple principle: a good tax system should raise revenue efficiently, support economic growth, protect the vulnerable, and strengthen trust between governments and citizens,” Oyedele stated.
He disclosed that minimum wage earners had been exempted from personal income tax under the reform agenda, while tax burdens on low- and middle-income earners had also been reduced.
On corporate taxation, Oyedele said the government was proposing lower corporate income tax rates to improve Nigeria’s attractiveness to investors and stimulate business growth.
He further explained that the government was modernising the Value Added Tax framework by expanding input VAT credits and clarifying exemptions for essential goods and services.
According to him, the move would reduce production costs across supply chains and help moderate inflationary pressures in the economy.
The minister also decried the impact of multiple taxes and levies on businesses, revealing that the Federal Government was collaborating with state governments to harmonise taxes and reduce compliance burdens.
He disclosed that 15 states had already enacted tax harmonisation laws and urged others to follow suit.
Oyedele added that technology would play a critical role in modern tax administration, with the government prioritising automation, data integration and digital filing systems to improve compliance and efficiency.
Despite the progress, he acknowledged lingering challenges such as weak institutional capacity, difficulties integrating the informal sector and low public trust in the tax system.
Also speaking at the conference, Vice-President Kashim Shettima defended the Federal Government’s tax reforms, describing them as pro-people and pro-business policies aimed at lifting millions of Nigerians out of poverty and repositioning the economy for sustainable growth.
Represented by his Special Adviser on Economic Affairs, Dr. Tope Fasua, Shettima said the administration of President Bola Tinubu was working towards building an economy where Nigerians could prosper regardless of their social background.
He added that the government also aimed to make Nigerian products globally competitive while transforming the nation’s tax administration into a model for Africa.
The vice president, however, acknowledged widespread scepticism and misinformation surrounding the reforms, noting that many Nigerians found it difficult to believe the proposed changes because they had never experienced similar policies in the past.
He stressed the need for sustained public sensitisation, describing tax reform as more than a fiscal policy initiative but “an act of patriotism” capable of laying the foundation for national prosperity.
Earlier, the 17th President and Chairman of Council of the Chartered Institute of Taxation of Nigeria, Innocent Ohagwa, described the new tax regime as the most comprehensive overhaul of Nigeria’s fiscal structure in over three decades.
Ohagwa said the reforms aligned with the federal government’s ambition of growing Nigeria into a $1tn economy before the end of the decade.
He noted that Nigeria had historically battled weak revenue generation and excessive borrowing but argued that the reforms were already producing results.
According to him, Nigeria’s revenue-to-debt servicing ratio declined from 120 per cent in December 2022 to 68 per cent by the end of 2025.
He maintained that broadening the tax base and simplifying the tax system would help Nigeria transition “from a nation that borrows to survive to one that invests to thrive”.
Former Edo State Governor Adams Oshiomhole also backed the reforms, insisting that taxation remained central to governance and national development.
Oshiomhole argued that wealthy Nigerians should bear greater tax responsibilities, particularly individuals earning above N20m monthly and owners of private jets, in line with practices in advanced economies.
The conference, themed “Tax Reforms and Global Relevance: Positioning Nigeria’s Tax System for Sustainable Future”, focused on strengthening transparency, inclusiveness and public trust in Nigeria’s fiscal governance framework.
