Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that more than 90 percent of operators in Nigeria’s informal sector lack the financial capacity to pay taxes, challenging the long-held notion that the government’s untapped revenue lies within that segment of the economy.
Speaking during an interactive session with journalists, influencers, and public analysts on Friday, Oyedele explained that the government’s continuous attempt to extract taxes from small-scale informal operators had led to the proliferation of multiple taxes across the country.
“This is the reason why Nigeria has ended up introducing multiple taxes — because we keep chasing people in the informal sector,” Oyedele said. “When in fact, more than 90 percent of operators in that sector are just there for survival. They are only trying to put food on the table from one day to the next. They have no capacity to pay taxes.”
He illustrated his point with everyday examples of low-income earners struggling to make ends meet.
“If somebody is roasting corn by the roadside, or a vulcaniser fixing tyres, or a wheelbarrow pusher helping people carry goods — even if they have customers all day, they are still poor,” he noted. “They should not be taxed.”
According to Oyedele, this understanding informed President Bola Tinubu’s directive that poverty and capital must not be taxed, describing the government’s approach as one that prioritises economic growth over short-term revenue.
“We should not tax seeds but wait for the fruits,” he added, stressing that genuine wealth creation must precede taxation.
Stronger Tax System and Accountability
Oyedele highlighted that Nigeria’s new tax reforms are designed to make tax evasion more costly for individuals, consultants, and even tax officials, while tightening governance and transparency within the system.
He revealed that the Federal Inland Revenue Service (FIRS) collected over ₦20 trillion in taxes last year and is on course to surpass that figure in 2025. However, he noted that the reforms have gone further by establishing new accountability mechanisms.
“These new tax laws have introduced more structures, provisions, and reporting requirements to ensure that tax officials do their work responsibly and diligently,” he explained. “There are even personal liabilities for officers who fail to carry out their duties. We’ve strengthened governance and accountability in ways that were not in place before.”
He added that the reforms also eliminate leakages, ensuring that all tax revenues now flow directly into the federation account, rather than into accounts previously controlled by the FIRS.
Tackling Corruption and Tax Evasion
Oyedele admitted that corruption in Nigeria’s tax system has historically involved taxpayers, consultants, and tax officers, but said the new laws now hold all parties accountable.
“Under the new system, evading taxes is more expensive,” he said. “Consultants must be registered and monitored, while tax officers face stricter scrutiny and penalties for misconduct.”
According to him, the overarching goal of the reforms is to create a fair, transparent, and efficient tax system that supports growth while protecting vulnerable Nigerians from excessive tax burdens.
Whatever it is that the FIRS is doing today, under the new tax law, it will become a better agency from all angles, Oyedele concluded.