Some financial experts have expressed support for the Federal Government’s plan to impose a 25% personal income tax on Nigeria’s wealthiest citizens, citing its potential to reduce inequality and increase national revenue.
In separate interviews with the News Agency of Nigeria (NAN) on Sunday, the experts noted that the new tax policy could help strengthen the economy if implemented effectively.
President of the Chartered Institute of Taxation of Nigeria (CITN), Mr. Samuel Agbelaye, praised the proposal, emphasizing its potential to improve Nigeria’s economic standing.
“For us to rejuvenate the country’s economy and transition from a potentially great nation to an actually great one, we need to learn from what advanced countries have done,” he said.
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Agbelaye pointed to Sweden, where the wealthiest citizens face a minimum tax rate of around 45%, yet the country remains prosperous with a high quality of life.
He believes Nigeria could similarly benefit from this tax policy, which could also increase political engagement among the elite, leading to greater accountability and better provision of public goods.
“This could translate into providing much-needed public services for all citizens, regardless of their status,” Agbelaye added.
Similarly, former President of CITN, Mr. Mc-Antony Dike, endorsed the 25% tax proposal, stating:
“It is only fair for those who earn more to contribute more to the nation’s commonwealth.”
- He argued that the wealthy benefit the most from government policies and services, so they should be prepared to contribute a larger share in taxes.
- Dike also dismissed concerns that economic downturns should exempt the rich from higher taxes, pointing out that they continue to generate significant income despite challenges.
- Former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr. Okechukwu Unegbu, also backed the proposed tax policy, suggesting it should be extended to top corporate executives and individuals with extravagant lifestyles who lack a clear justification for their wealth.
“The government’s decision is sound, but it should also include Pentecostal clergy, many of whom live in excessive affluence while the economy struggles,” Unegbu said.
He further stressed the need for the federal government to exercise prudence in managing public funds, ensuring that the additional revenue generated from the new tax policy is used efficiently for the benefit of all Nigerians.
This, he noted, would help to gain the support and trust of citizens during the policy’s implementation.
Backstory
- Speaking during a breakout session of the recently concluded 30th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Ministry of Budget and National Planning, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, had hinted plans to tax wealthy Nigerians.
- According to him, Nigerians earning N100 million and above, annually, could face a 25% personal income tax if the proposed tax bill is passed by the National Assembly.
- Oyedele noted that 90% of the current taxpayers in Nigeria are individuals who should not be taxed.
- He called for a more equitable tax system that eases the burden on lower-income earners while ensuring the wealthy contribute a fairer share of government revenue.
