The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that Africa must remove disincentives to investment to grow revenue.
He emphasised this in a post on his X handle on Monday, October 13, to explain what he meant by “The True Cost of Tax”.
He suggested that it is time for Africa to rethink its revenue mobilisation strategy.
“Africa must remove disincentives to investment and barriers to growth, and revenue will follow. It’s time to rethink our revenue mobilisation strategy, including adopting a supportive rather than extractive approach toward the informal sector,” Oyedele suggested.
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He pointed out that by reducing withholding tax rates, businesses can have cash for expansion.
It stressed that low-income earners and small businesses need to be exempted from taxes, as a nation cannot become rich by taxing poverty.
“The economy of collection isn’t just about administrative efficiency or cost-to-revenue ratio. It’s also about the opportunity cost to the taxpayer. What did the payer give up by paying the tax?
“If we tax the seed in the hands of taxpayers today, we might boost short-term revenue, but we undermine long-term wealth creation and lose the opportunity to tax the fruits tomorrow,” Oyedele explained.
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The tax expert added that these lines were an excerpt of his interview with a Kenyan journalist.
“I enjoyed granting this interview in Kenya with Julians Amboko, a brilliant financial journalist at Nation Media Group – the largest independent media organisation in East and Central Africa,” he said.
Pinnacle Daily reports that the tax committee chairman has been engaging with stakeholders to drive home the new tax laws signed into law by President Bola Tinubu and expected to come into effect from January next year.
At an interactive session on October 3, in Lagos, Oyedele highlighted key troubling spots, including personal income tax, value-added tax, tax identification, the informal sector, and tax harmonisation in the new tax laws, stating that it is usual for tax reforms to be misunderstood anywhere in the world.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
