Economy
Nigeria Mulls Compressing Taxes into 8 Categories, N800/$1 Customs Duty
By Adedapo Adesanya
The Presidential Fiscal Policy and Tax Reforms Committee has recommended the harmonisation of taxes and levies collectable by the three tiers of government into eight broad headings.
The Chairman of the committee, Mr Taiwo Oyedele, said the proposed streamlining of taxes sought to make tax administration modern, simple, and adaptive to the Nigerian economy.
Speaking at a public consultation workshop for journalists and public analysts with the theme, Proposed Changes to the National Tax Policy, Tax Laws and Administration, in Lagos on Thursday, Mr Oyedele also urged the federal government to adopt an exchange rate of N800 per Dollar for customs import duty.
He expressed concern over the import duty rate, which constantly changed due to the volatility of the foreign exchange (FX) market, adding that this does not allow for adequate planning by businesses.
According to him, “When we did the budget, we said Naira to Dollar will be N800, now it is 1,000 something. People need to plan.
“So now, we’re saying, dear government, can you, please, sign an order that says for paying import duty, we shall use N800… for the rest of the year till December. So, we have proposed N800.”
The proposed list of harmonised taxes and levies included income tax, property tax, Value Added Tax (VAT), customs duties, excise tax, stamp duties, special levy, and harmonised levy.
Mr Oyedele said, “The principles that we are working with is to do away with nuisance taxes with very low revenue yield, high cost of collection and ultimate burden on the poor and small businesses.
“We are focusing on high revenue yielding taxes that are broad-based and relatively easy to collect by merging taxes and levies that are imposed on the same or substantially similar tax base and keep the total number of taxes across all levels of government to a single digit.”
He said the committee further recommended the institutionalisation of tax harmonisation reforms to ensure its sustainability.
Mr Oyedele explained that the committee had consolidated the education and police taxes under the special levy, adding that “We introduced the special levy with just one rate and we take out all those other taxes”.
He said the Harmonised Tax Levy (HTL), which comprised road and market taxes, was meant to cater for the local governments.
He said under the proposed new tax regime, income tax should now comprise Company Income Tax (CIT), Withholding Tax (WHT), CPT, and capital gain tax, among others.
“We are hoping that when we are done there will be no consumption tax in any state. We will just agree that it is VAT and it is VAT.
“We will specify who is paying it, who is collecting it and who owns the tax. Nigerians tend to assume that if the FIRS (Federal Inland Revenue Service) collect taxes it is for the federal government alone.
“No. Even though the number of taxes we propose is eight, the federal government will feel like collecting five taxes; state governments will feel they are collecting seven taxes; local governments collecting six taxes.”
According to him, “All these will be done automatically and when we are done, there will not be need to be sharing FAAC on a monthly basis.
“The tiers of government will get their accounts credited daily.”
He stressed that the objective of the committee was to simplify the tax to reduce the burden on businesses, particularly SMEs.
Mr Oyedele said part of the committee’s advocacy was an exemption for withholding taxes for small businesses within the range of N50 million annually as they will lack the capacity to comply.
He also revealed that the committee’s reform of the withholding tax, which he said remained the most difficult and complex tax to comply with in Nigeria, had been approved.
“The good news is that it has moved from proposal to approval because it has been signed, waiting to be gazetted. Among our objectives is to simplify the tax to reduce the burden on businesses, particularly SMEs.
“We want to promote competitiveness, prevent tax avoidance, detect tax evasion and close the tax gap that reflects what is happening globally.”
He also said, “We have reduced the rates for businesses producing goods and services because their margins are very small.
“We have created exemptions for manufacturers. So, if you are manufacturing anything, do not worry about withholding tax.
“We have put measures to curb evasion. These are part of the reforms that we have introduced in withholding tax regulation that has just been approved.”
The committee further recommended that any extra revenue incurred by the government should be used to pay down its Ways and Means borrowing from the Central Bank of Nigeria (CBN).
It also urged the federal government to use some portion of banks’ Cash Reserve Ratio (CRR) to provide concessionary interest rates at a single digit for manufacturers.
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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