FG Seeks End To Multiple Taxes On Businesses

The Chairman, Presidential Fiscal Policy and Tax Reform Committee, Mr Taiwo Oyedele, has recommended a higher percentage of Value Added Tax (VAT) sharing for states and local government councils. He also demanded that states should put an end to multiple taxation on individuals and businesses.

Making the disclosure in a statement on his X handle, he clarified that his committee did not recommend higher FAAC disbursement revenue for states and local government as being insinuated, adding that what his committee proposed was for Vat. “We did not recommend a reduction in the Federal Government’s share from the federation account.

“Our recommendation is in respect of VAT revenue, to increase the share of states and local governments from 85 per cent to 90 per cent and for states to discontinue with their other forms of consumption taxes which constitute multiple taxation on businesses and individuals,” he clarified.

The formula for VAT distribution when it was first introduced was 50 per cent to FGN; 35 per cent to the states; and 15 per cent to LGAs. With effect from January 1999, the formula was adjusted as follows: FGN 15 per cent, states, 50 per cent and LGAs and area councils of the FCT, 35 per cent.

Oyedele’s clarification came on the heels of an earlier report suggesting that his committee had recommended a new sharing formula for the proceeds of the Federation Account Allocation Committee (FAAC).

“This change in the sharing formula is part of broader reforms aimed at eliminating numerous “nuisance taxes” and streamlining the tax collection process,” he added.

Oyedele said that the Federal Government had to make this concession to get states on board with a centralised and more efficient tax collection system.

“The new approach not only simplifies tax collection but also lays the foundation for fiscal federalism, giving states and local governments more autonomy over their revenues,” Oyedele said.

However, the question remains whether the Federal Government will also reduce its share of Personal Income Tax (PIT), which is traditionally collected by states.