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Understanding the Tinubu tax reforms

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By Dapo Okubanjo

It is slightly more than one year into the President Bola Tinubu administration and like many other countries across the world, Nigeria is going through a cost of living crisis.

This has for some time led to hues and cries over some of the reforms introduced by the administration, chief among which are the fuel subsidy removal and the unification of multiple exchange rates.

But one issue that many Nigerians especially those in the opposition have not stopped talking about and are literally shouting to the rooftop over, is that of taxation especially against the President’s vow to improve on the country’s tax revenue.

It is almost normal to see social media posts suggesting that President Tinubu had since assuming office been introducing new taxes or increasing existing ones.

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Opposition politicians are also known to have jumped into the fray with claims of multiple taxations which are largely political and untrue.

There is however history to these untrue claims and this has to do with, how as governor of Lagos state between 1999 and 2007, Asiwaju Bola Tinubu caused a quantum leap in the state’s Internal Generated Revenue (IGR).

President Tinubu had variously said he inherited a miserly IGR of N600m when he assumed office in 1999 and snippets from CBN data have shown that the state’s IGR in same year was N14.6bn.

By the time Tinubu was leaving office in 2007, the figure had risen to N83.02bn with a monthly average of N6.9bn. So technically between 1999 and 2007, the state’s IGR growth rate stood at 468.63 percent, showing a considerable increase when his successor,Babatunde Fashola was assuming office.

Between then and now, there have been a lot of writeups on how the then Governor Tinubu leveraged on technology to re-engineer the tax collection system and also reformed financial structure to make it happen.

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Subsequent administrations in the state have since been building on that template and today, Lagos has an IGR that can easily compete and is indeed competing favourably with that of many African countries

But President Tinubu has constantly been called names for that feat by those who have no understanding of the length he went to broaden the tax net in Lagos as well as modernize tax collection in the state.

And when, soon after assuming office, he pledged to improve on tax collection at the centre and build on the reforms of the Muhammadu Buhari administration, it did not come as a surprise that many uninformed Nigerians, mainly in the opposition, latched on a poorly edited ten seconds footage from the 2019 Bola Tinubu Colloquium to spread false narratives about his intentions.

Shockingly, even a Professor of Mass communications in an American University, Farooq Kperogi, who prides himself as a thorough individual was one of those who fell for that gimmick but luckily, fact checking agencies have conveniently proved him and other naysayers wrong.

Now to understand the sort of tax regime the President has in mind, it would be necessary to follow the trend of the work being done by the Presidential Committee on Fiscal Policy and Tax Reforms led by a renowned Tax expert, Taiwo Oyedele since it was constituted in 2023 with a one year timeline to conclude its task.

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Clearly President Tinubu has no intention to toe the path of his brother President, William Ruto of Kenya who initiated a finance bill that nearly tore the East African country apart before it was withdrawn.

Rather than increase taxes or introduce additional ones, President Tinubu and his team, from the Oyedele-led committee to the Federal Inland Revenue Service (FIRS), have been systemic in demolishing tax barriers affecting business growth even as they set their gaze on a higher tax collection level.

In one of his public engagements, Oyedele said: “We propose to repeal many of these burdensome taxes, harmonize the few that are justifiable, and digitize the collection process with multiple channels including USSD to drive efficiency, reduce leakages, and promote accountability.

It is a huge task considering that the Tinubu administration is eyeing a tax to GDP ratio of 18% by 2026 up from the current abysmal level of 10.86%

But in the midst of this, the Committee has identified 60 official taxes and 200 unofficial ones across the country which the government plans to shrink to 9 in line with the Presidential directive for a single digit tax system.

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As part of the ongoing fiscal policy and tax reforms, a new withholding tax regime has also been approved which will amongst others exempt small businesses with an annual turnover of N25m or less from paying withholding tax.

The new policy has since taken effect from July 1 2024 and according to the man overseeing the tax reforms, manufacturers and farmers would be exempted while businesses operating on low margins, would benefit from reduced withholding tax rates.

There are however indications that the new withholding policy which replaces the one that had been in place since 1977 is one of five draft Executive Orders on tax matters that President Tinubu is rolling out.

And now that the committee is set to wrap up, a Finance bill would be sent to the National Assembly in due course to codify a new tax regime for the country that is almost certain to take effect from January 1 2025.

Interestingly, those who have over the years flew the kite of Tinubu the tax master are silent about the creative tax initiatives while others are still not letting go of false narratives but any unbiased observer of the polity can easily see that the President is proving naysayers wrong by taking steps to reduce multiple taxes.

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And if what President has been doing in recent times on the issue of tax is anything to go by, it is safe to say that he will go down in history as a tax reformer by the time he completes his tenure in office.

 

Okubanjo, a journalist and public affairs analyst writes from Abuja via dokubanjo@yahoo.co.uk

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President Tinubu and Baba Adebanjo: A ‘Ringside’ Story

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By Tunde Rahman

Since Afenifere leader Pa Ayo Adebanjo passed away on February 14 at 96, many have praised his significant contributions to Nigeria as a frontline nationalist, a key role player in the politics of the first and second republics, and an uncompromising devotee of the late Chief Obafemi Awolowo.

Active in the First Republic Action Group, the Second Republic Unity Party of Nigeria, and Alliance for Democracy from 1999, Baba Adebanjo fought tirelessly for democracy. He consistently advocated for true federalism and the country’s political and economic restructuring based on the 1963 Republican Constitution.

Pa Adebanjo was also a well-known activist who stood for equity, truth, and justice. He fought against all forms of injustice and oppression including military dictatorship.
In this respect, I recall his relationship with President Bola Tinubu.

When Asiwaju Tinubu, then a founding chieftain of the defunct AD, decided to run for Lagos governorship, Pa Adebanjo fully supported him, championing transparency in the process that produced him as the candidate of his party. Despite the initial opposition within the party, Baba Adebanjo and other young party members opted for open party primaries, helping Tinubu to emerge as the candidate. Tinubu went on to win the governorship election and was inaugurated on May 29, 1999.

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Grateful for the support, Asiwaju maintained a strong relationship with Baba Adebanjo. Even when their political paths diverged, Tinubu held Baba in high regard. The President said this much in his incisive tribute to Pa Adebanjo, which I quote in part thus:
“In moments of national crisis, Baba’s courage shone brightest. When democracy hung in the balance after the annulment of the June 12, 1993 presidential election, he joined the National Democratic Coalition (NADECO) as one of the leading voices against military dictatorship, helping to galvanise a movement that became the bedrock of our collective struggle to reclaim democratic governance.

“His unwavering commitment to truth and justice extended to my journey as a governorship candidate in 1999. Baba Adebanjo’s steadfast support was instrumental in my election as Governor of Lagos State under the platform of the Alliance for Democracy.

“Though our political paths diverged in later years, my respect and admiration for him never wavered. Until his death, I shared a deep personal bond with Baba Adebanjo; he was like a father figure.”

Many in Tinubu’s position might have taken issue with Baba, who sometimes openly criticised him. But not Asíwájú. As an Omoluabi—a person of good character—Tinubu respects elders and institutions, giving honour where it’s due.

How do I know President Tinubu highly regarded Baba Adebanjo? As a journalist and editor, I was well-known to Baba Adebanjo. I interacted with and interviewed him on many occasions during my active years in journalism. So when I became Asiwaju’s Media Adviser, I became the envoy of sorts, the message-bearer for both. Baba Adebanjo would telephone me, saying, “Rahman, Rahman, so fun Oga e pe mo fe ri. To ba wu yin ke wa, to ba wu yin ke ma wa. Tie na la fe so fun,” meaning “Tell your Principal I would like to see him. If he likes, let him honour my invitation. It’s to his benefit if he comes.”

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We visited Baba at his residence in Lekki, Lagos, several times. On other occasions, Baba called at Bourdillon, the Ikoyi residence of Asiwaju, along with his entourage.

There is, however, a hilarious and instructive story about the two, which speaks to the admiration and high regard President Tinubu had for Baba, which essentially is the focus of this article. It was during the 90th birthday of Baba Adebanjo, sometime in April 2018. I remember vividly that that particular birthday fell on a Sunday. But a birthday colloquium came up on a Thursday, three days before the actual birthday. We had lodged in our dairy for Asiwaju, the birthday lecture, as well as other activities and events lined up to celebrate the distinguished elder statesman. While focusing on the birthday date, I forgot the preceding Thursday event at Landmark Event Centre in Victoria Island, Lagos. Luckily for me, around 9am that Thursday, the traditional ruler of Oke-Ila in Osun State, Oba Dokun Abolarin, telephoned me, saying he was in Lagos and asking if Asiwaju was coming for the birthday lecture. Knowing I had failed to alert Asiwaju about the lecture the previous night, I smelled trouble.

I immediately raced to Bourdillion in Ikoyi. When I went upstairs to see Asiwaju, he was reading newspapers, oblivious of any early morning engagement that day, particularly that of Baba Adebanjo. I informed him about the event and apologised that I had my mind set on the birthday date on Sunday. The lecture was slated for 10 am, and time was already 10 am. Asiwaju, livid, sprung to his feet. By this time, my colleague Ademola Oshodi had joined me in Asiwaju’s room. Without any prompting, we prostrated and apologised again.

Those close to President Tinubu know he is a very proficient politician in Yoruba as he is in English, complete with street lingo. Still seething in anger, Asiwaju said in Yoruba, “Hen hen, idobale yin yen ni emi ma te’ bati. Ma de ibi lecture, won a ma so pe mo moo mo pe de ni ki nba le da ijoko won ru,” meaning, “So it’s this your prostrating that will now count. I will get to the event now, and they will allege that I deliberately came late so I can cause a stir and disrupt the lecture.”

Somehow, Asiwaju quickly prepared to attend despite our tight schedule as we were meant to travel to Abuja that same day. We got to the occasion around noon after the program had been on for about two hours. One important personality I could not readily remember was on the podium.
Though we arrived late, Tinubu’s presence stirred excitement, and he delivered a heartfelt speech.

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As President Tinubu predicted, his arrival caused a big stir and a temporary halt in the programme. As we made to leave, another commotion that did not subside even after our departure ensued. I suspect Asíwájú’s departure might have signaled the virtual end of the program.

That was not the end of the story, though. A couple of days later, I heard Uncle Jimi Disu, a known Asiwaju critic, on his regular programme then on Classic FM, talking about Baba Adebanjo’s birthday lecture, alleging that Asíwájú ‘sauntered’ into the programme uninvited and disrupted the birthday lecture of the nonagenarian. I could not believe my ears. I went on that program afterward to debunk what he said. I narrated what happened, that Asiwaju had tremendous respect for Baba and that he would have avoided the kind of situation that played out if I had briefed him of the timing of the programme.

This incident underscores the critical role of aides in supporting leaders to function effectively. Aides must guide them accurately, as their actions and inactions can significantly impact leadership outcomes. An oversight on my part unintentionally fueled what would have resulted in animus between Baba Adebanjo and Tinubu.

-Rahman is Senior Special Assistant to President Tinubu on Media, Publicity and Special Duties.

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Between Japan’s Kaizen philosophy and Nigeria’s National Values Charter

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By Temitope Ajayi

Two days after DeepSeek took the world by surprise, a Financial Times report warned that the West should be worried by how China appears to be leading the Artificial Intelligence race.

Financial Times says the emergence of DeepSeek from the shadows, catching the West unawares, is a strong indication that China has mastered the art of ‘Kaizen’.

I recall that my first encounter with Kaizen, the philosophy that underpins the rise of Japan as the Asian economic powerhouse, is about 10 years now.

Societies like China, Japan, and South Korea that anchor their development models on their culture and value systems continue to break new grounds and are far ahead in innovation and human advancement.

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At the heart of Japan’s success, especially in the manufacturing and service sectors, is the work ethics that are firmly rooted in the Kaizen philosophy. ‘Kaizen’ is a Japanese word that means continuous improvement or change for the better. The quest for excellence and attention to detail have been weaved into the social and moral fabrics of Japanese society as a matter of obligation.

It is this philosophy and social imperative that the Japanese take into product designs and execution. It is, therefore, not surprising that the world sees continuous improvement in every new edition of Japanese products like Toyota automobiles.

The concept of Kaizen became popular in the United States by the 1980s when it was discovered that the performance of Japanese companies was much better than their American counterparts. It became apparent that the difference between Japanese and American companies in terms of effectiveness and operational efficiency was the application of the Kaizen principle.

Kaizen philosophy is similar to the Yoruba Omoluabi ethos. Every major ethnic group and subculture in Nigeria and Africa has its own equivalent of such value systems.

We can only imagine our pace of development and progress as a country if we develop a national value system around the virtues of excellence, honour, and integrity. This means our workmen and women will pursue excellence as second nature in everything. Politicians will embrace public service as a matter of honour, and citizens will accept integrity as an article of faith in undertakings.

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Our society is hemorrhaging as a result of value degradation. It is heartbreaking how badly we have drifted because we neglected our cultural values and practices that served as the guiding principles of society.

It is the responsibility of leaders at all levels to direct society to embrace enduring values that edify and promote human development. I believe we can still recover lost grounds. This is why the efforts being made by the Mallam Lanre Issa-Onilu-led National Orientation Agency to re-ignite a new wave of consciousness through the National Values Charter should be appreciated and promoted. The values charter has already been approved by the Federal Executive Council. President Bola Tinubu is leading this renewed effort to push value re-orientation to the forefront of public policy and national development agenda.

-Ajayi is Senior Special Assistant to President Tinubu on Media and Publicity

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Tinubu’s quest to overcome the power sector gridlock

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By Temitope Ajayi

Angered by the appalling situation of Nigeria’s electricity supply sector over several decades of doing the wrong things by successive governments with no remedy in sight, even after hundreds of billions of public funds had been expended, President Muhammadu Buhari in 2018 chose a different path that had worked in other jurisdictions.

He reached out to the then German Chancellor Angela Merkel to help solve the protracted power gridlock in Nigeria. The discussion between the two leaders gave birth to the FG-Siemens Energy AG Presidential Power Initiative in 2019. Under the terms of the agreement of the Nigerian Electrification Roadmap, Siemens Energy would ramp up electricity generation in Nigeria to 25,000 megawatt in six years, in three phases, from an average of 4000 megawatts the country had been stuck with for decades.

President Buhari was quite bullish about the project such that he put it under the direct supervision of his office with his Chief of Staff, late Abba Kyari, as the directing officer. The former president who didn’t want the project to be derailed by bureaucratic bottlenecks and red-tape made sure all man-made obstacles and deliberate obstructions were bulldozed with Abba Kyari in charge.

The unfortunate demise of Kyari in 2020 arising from Covid-19 while in Germany to get the power project underway rolled back the speedy implementation of what would have been a game-changer in Nigeria’s elusive quest for a stable and reliable power supply. Nigeria’s economy had been blighted by years of poor electricity supply. From available records, Federal Government has spent over $30 billion dollars to revamp the sector in the last three decades without any substantial progress. The economy is run on generators with Nigerians spending a staggering $10billion dollars (N7.6 trillion) annually on petrol and diesel to run their generators including the cost of maintenance, according to a 2024 report, “Beyond Gensets: Advancing the energy transition in Lagos State” published by Sustainable Energy for All (SEforALL).

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True to his campaign promise to build on the achievements of his predecessor across all sectors and improve on governance performance in areas where it is required, President Tinubu, in demonstration of his unshaken believe in continuity of governance, took on the FG-Siemens Power Project as part of his priority projects in the energy sector.

It is necessary to state that this all-important power project had suffered undue delays since July, 29, 2020 when the Federal Executive Council approved the payment of €15.21m and N1.708bn as part of Nigeria’s counterpart funding for the offshore and onshore components of the project.

Managing Director, Siemens Energy Nigeria, Seun Suleiman, was quoted as saying then that, “Siemens Energy is committed to working with the Federal Government of Nigeria through the FGNPowerCo to see a successful implementation of the presidential power initiative. We have successfully carried out a similar project in Egypt.

“This project will transform the energy landscape of the country, and we are grateful the government has entrusted us with this notable initiative. We are capable, and we will deliver excellent results.”

In 2021, FGN Power Company, the Special Purpose Vehicle established by the Federal Government of Nigeria for the implementation of the PPI, announced the commencement of the grid network studies and power simulation training for technical experts in the Discos, TCN, NAPTIN and NERC, including provision of specialized power simulation softwares for TCN, NERC and all Discos. By December 2024, more than 100 experts across the sector have been trained on power systems simulation and network planning with skills to better manage the grid operations at various levels.
In the same year 2021, the Federal Executive Council approved the contract for the supply of 10 mobile substations and 10 power transformers by Siemens Energy for quick reinforcement of the grid as part of the pilot Phase of the project. Reports by FGN Power Company indicate that all the equipment have since been supplied and installed across the country.

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However, the overall pace of the project delivery in terms of meeting timelines has not been impressive.

On assumption of office, President Tinubu saw the need to continue with the project and how timely delivery can transform the power sector for a country that desperately needs a reliable power supply for industrialisation and grow its economy. The status of the project came up at a bilateral meeting between President Tinubu and German Chancellor Olaf Scholz during the latter’s working visit to Nigeria in August 2024 in Abuja. At a follow-up engagement in Dubai in December 2024 during COP28, the Nigerian Government and Siemens Energy AG signed an accelerated performance agreement aimed at expediting the implementation of the Presidential Power Initiative (PPI) to improve electricity supply in Nigeria. The agreement that was signed by Kenny Anuwe, Managing Director/CEO of FGN Power Company and Ms. Nadja Haakansson, Siemens Energy’s Senior Vice President and Managing Director for Africa, was witnessed by President Tinubu and Chancellor Scholz.

Under the accelerated performance agreement, Siemens Energy will see to the end-to-end modernization and expansion of Nigeria’s electric power transmission grid with the full supply, delivery, and installation of Siemens-manufactured equipment.

Furthermore, the agreement will ensure project sustainability and maintenance with full technology transfer and training for Nigerian engineers at the Transmission Company of Nigeria (TCN).

In a major demonstration of President Tinubu’s commitment to the power project and a positive shift towards execution, the President led the Federal Executive Council on December 16, 2024 to approve €161.3 million Euros for the execution of the contracts in the first batch of the Phase one of the projects across the country following earlier approval of the transaction by the Bureau of Public Procurement.

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Addressing journalists after the FEC approval, an enthusiastic Minister of Power, Adebayo Adelabu, with the renewed vigour to deliver on the project said, “at the Federal Executive Council meeting, there were basically two approvals for the Federal Ministry of Power, as I presented. The first was actually an approval for the award of contract for engineering, procurement, construction and financing for the implementation of the 331 32 KV And 132 33 KV substations upgrade under Phase One of the Presidential Initiative, popularly known as the Siemens project consequent upon completion of the pilot phase of this project.

“So, the Federal Executive Council considered it necessary for us to move forward as promised by the President of the Federal Republic of Nigeria at a meeting he held with the President of the Republic of Germany.”

The latest FEC approved scope of work includes upgrade of TCN substations in five locations of Abeokuta (330/132/33kV), Ayede (330/132/33kV), Offa (132/33kV), Onitsha (330/132/33kV) and Sokoto (132/33kV). These substations were carefully selected as Batch 1 of the brownfield scope of the Phase 1 projects to increase the wheeling capacity of the transmission network grid.

In the same vein, FGN Power Company will implement assets upgrade and enhancement in the distribution networks, in collaboration with the Distribution Companies (Discos) to ensure last-mile delivery of the evacuated power to industrial customers and residential consumers. These locations are load centres that are currently underserved and require swift enhancements. The execution of the project will be fast tracked and completed under the President Bola Ahmed Tinubu administration.

It’s important to state that the FGN Power Company has started working on other priority brownfield and Greenfield projects in target load centres across the country. Special attention is also being paid to the execution of systems and products to enhance grid resilience and stability to reduce the frequent occurrences of grid disturbances.

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In December 2024, Minister of Power Adelabu commissioned the mobile substation in Saapade, a suburb of Shagamu in Ogun State. This has enhanced power evacuation and delivery to industrial customers within the Shagamu hub. Similarly, another mobile substation was commissioned at the Ajibode area of the University of Ibadan to enhance power delivery to the university community and adjoining areas. Before then, mobile substations and power transformers have been commissioned and energized in Ajah Lagos, Mando Kano, Jebba Kwara State, Okene Kogi, Amukpe Delta, Potiskum Yobe, Apo Abuja and Ihovbor Edo.

While the implementation of the Presidential Power Initiative is going on, President Tinubu has equally inaugurated the Presidential Metering Initiative, which aims to increase the rate of smart metering of all customers in a commercially sustainable manner. The roll out of the metering solutions has started. It is expected that the combined impact of assets upgrade through Presidential Power Initiative (PPI) and metering through the Presidential Metering Initiative (PMI), coupled with efforts of subnational electricity markets will bring lasting solutions to the challenges of electricity supply in Nigeria.

With President Tinubu’s committed leadership, the parlous state of the power sector will be reversed, and Nigerians and the economy will experience a new lease of life with reliable electricity supply that will geometrically increase productive activities. Indeed, the president’s strategic approach to resolving the multifaceted challenges in the power sector is yielding visible results. The restructuring of the tariff regime, intervention in the commercial imbroglio on gas supply, additional investments in infrastructure through PPI, enactment of the new Electricity Act which provides legal framework for further decentralisation of the sector and devolution of more responsibilities to the subnational governments, are all part of the renewed hope agenda for the power sector to bring sustainable solutions.

-Ajayi is Senior Special Assistant to President Tinubu on Media and Publicity

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