The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Tuesday said Nigeria could no longer rely mainly on borrowing to fund development, warning that the country must build a sustainable fiscal system capable of supporting critical sectors of the economy.
Oyedele stated this while speaking at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria in Abuja.
The minister’s remarks came barely 24 hours after The PUNCH exclusively reported that the Federal Government had intensified engagement with the World Bank over a fresh $1.25bn loan targeted at supporting economic reforms, job creation and competitiveness.
“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.
He added that sustainability was not only about generating revenue but also about promoting growth, reducing inequality, protecting vulnerable groups, and encouraging productivity.
According to him, the Federal Government’s ongoing tax reforms are designed to make the economy more investment-friendly while improving fiscal sustainability.
Oyedele said the reforms were necessary because Nigeria’s tax system had long suffered from structural weaknesses, including multiple taxation, fragmented administration, weak compliance, and overdependence on a narrow revenue base.
“Businesses faced overlapping debts, unpredictable enforcements, and rising compliance costs. Citizens often perceived the tax system as unfair because the burden was unevenly distributed,” he said.
He noted that the situation had become unsustainable because government revenues remained insufficient to meet the country’s development needs.
The minister said the reforms were aimed at building a stronger fiscal foundation for long-term national development rather than introducing changes for their own sake.
“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 said.
He explained that the reforms sought to simplify the tax system, improve fairness, encourage investment, and reduce distortions within the economy.
Oyedele also disclosed that minimum wage earners had been exempted from personal income tax under the ongoing reforms, while the burden on low- and middle-income earners had been reduced.
On corporate taxation, he said the government was proposing reductions in companies’ income tax rates to improve Nigeria’s attractiveness as an investment destination.
Oyedele further said the government was modernising the Value Added Tax framework by expanding input VAT credits and clarifying exemptions for essential goods and services.
“This reduces cost buildup within the economy and improves efficiency across the value chain. This also helps to moderate inflation,” he said.
The minister also lamented the burden of multiple taxes and levies on businesses, saying the government was working with subnational governments to harmonise taxes and reduce compliance costs.
He disclosed that 15 states had already enacted tax harmonisation laws and urged other states to follow suit.
Oyedele stressed that technology would play a central role in the future of tax administration in Nigeria.
“We are therefore prioritising data integration, automation, digital filing systems, and a technology-driven compliance framework,” he said.
The minister, however, acknowledged that challenges remained, including weak institutional capacity, informal sector integration, and public trust issues.
Also speaking at the conference, Nigeria’s 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 the Special Adviser to the President on Economic Affairs in the Office of the Vice-President, Dr Tope Fasua, Shettima said the Tinubu administration envisioned an economy where ordinary Nigerians could prosper irrespective of social background.
He added that the administration was working towards making Nigerian-made products globally competitive while transforming the country’s tax administration into a benchmark for Africa.
The Vice-President acknowledged that one of the biggest hurdles confronting the reforms was public scepticism and misinformation surrounding the policy changes.
“Many Nigerians simply cannot believe it because it has never happened before,” he said, while insisting that President Bola Tinubu was neither anti-business nor anti-people, but committed to creating an environment where Nigerians could thrive.
Shettima also stressed the need for aggressive public sensitisation on the reforms.
He described tax reform as more than a fiscal policy exercise, saying it should be seen as “an act of patriotism” that can lay the foundation for national prosperity.
Earlier, the 17th President and Chairman of the Council of the Chartered Institute of Taxation of Nigeria, Innocent Ohagwa, described the newly introduced tax regime as the most comprehensive overhaul of Nigeria’s fiscal structure in more than three decades.
Ohagwa said the reforms aligned with the administration’s ambition of growing Nigeria into a $1tn economy by the end of the decade.
He noted that the country had historically struggled with weak revenue generation and excessive dependence on borrowing, but argued that the ongoing reforms were beginning to reverse the trend.
According to him, Nigeria’s revenue-to-debt servicing ratio, which stood at 120 per cent in December 2022, declined to 68 per cent by the end of 2025.
Ohagwa said broadening the tax base and simplifying the tax code would help Nigeria transition “from a nation that borrows to survive to one that invests to thrive.”
He added that the reforms would also help curb illicit financial flows, reduce informality in the economy, and strengthen accountability by improving the National Revenue Service’s technological surveillance.
Meanwhile, the Minister of Power, Joseph Tegbe, commended the reforms and said the country required “radical reformers” across all sectors to achieve meaningful development.
Former Edo State Governor and senator, Adams Oshiomhole, also backed the reforms, arguing that taxation remained central to governance and national development.
Oshiomhole said governments do not create wealth directly but rely on taxes to provide infrastructure, healthcare, education, and social safety nets.
He argued that wealthy Nigerians should contribute more to development efforts, noting that individuals earning above N20m monthly and owners of private jets should face higher tax obligations, as in advanced economies.
The former governor also urged Nigerians to make taxation a major issue in political debates.
In her welcome address, the Chairperson of the conference and National Chairperson of the Society of Women in Taxation, Caroline Ndubisi, described the gathering as a crucial platform for shaping the future of Nigeria’s tax system.
Ndubisi said taxation remained central to Nigeria’s economic transformation and called for tax systems that were fair, transparent, and trusted by citizens.
She also urged tax professionals to see themselves not merely as interpreters of tax laws but as “advocates of economic stability.”
The conference, themed “Tax Reforms and Global Relevance: Positioning Nigeria’s Tax System for Sustainable Future,” focused on the need for transparency, inclusiveness, and stronger public trust in fiscal governance..
