Can Nigeria Pay Less Tax and Still Grow? Taiwo Oyedele Thinks So

For decades, Nigeria’s fiscal debate has revolved around one central question:

how to increase government revenue without placing unbearable pressure on citizens and businesses. With rising living costs and a struggling private sector, many Nigerians assume that lower taxes would automatically mean slower economic growth. However, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, believes the opposite may be true.

According to Oyedele, Nigeria does not suffer from excessively high tax rates but from a narrow tax base and weak compliance. He argues that repeatedly increasing tax rates on a small group of compliant taxpayers is neither sustainable nor growth-friendly.

“Growth does not come from increasing tax rates on a few people,” Oyedele has said. “It comes from expanding the economy and bringing more people into a fair and efficient tax system.”

At the heart of the proposed reforms is a deliberate effort to reduce the tax burden on low- and middle-income earners. Oyedele explains that the reforms are designed to improve purchasing power, stimulate consumption, and ultimately support economic activity.

Under the new framework, about 98 percent of Nigerian workers are expected to pay either lower personal income tax or no Pay-As-You-Earn (PAYE) tax at all. Individuals earning up to ₦1.2 million annually, he says, should not be paying PAYE tax. By allowing workers to retain more of their income, the reforms aim to boost household spending and improve overall economic confidence.

Critics often argue that lowering taxes could reduce government revenue at a time when Nigeria urgently needs funds for infrastructure, healthcare, and education. Oyedele counters this concern by emphasizing that lower taxes for the majority do not automatically translate into lower revenue.

“When the economy grows, revenue grows,” he explains. “People pay taxes not because rates are higher, but because more people are working, more businesses are profitable, and the tax base is wider.”

Rather than focusing on higher tax rates, the reforms seek to grow revenue through economic expansion, improved compliance, and the formalization of businesses that currently operate outside the tax net.

Small and medium-sized enterprises (SMEs), which form the backbone of Nigeria’s economy, are also expected to benefit significantly. The committee notes that simplified compliance procedures and reduced tax pressure will encourage small businesses to operate formally and stay compliant.

Oyedele believes that when taxes are simple, fair, and transparent, compliance improves naturally. “You cannot tax people into prosperity,” he says, stressing that trust and clarity are essential for a functional tax system.

Another key pillar of the reform agenda is the use of technology and automation. According to Oyedele, improved digital systems will help reduce revenue leakages, eliminate duplication, and enhance coordination between federal and state tax authorities. This, he argues, will enable the government to earn more revenue without increasing the burden on taxpayers.

So, can Nigeria pay less tax and still grow? Oyedele believes it can—by shifting the focus from higher tax rates to economic growth, fairness, and broader compliance. However, he acknowledges that the success of the reforms will depend heavily on effective implementation, transparency, and sustained public trust.

As Nigeria prepares for a new phase of fiscal reform, the coming years will test whether a growth-driven, people-focused tax system can truly deliver both prosperity and revenue stability.