Business
Experts endorse FG’s 25% tax proposal for Nigeria’s wealthiest, cite economic gains
Financial experts have expressed strong support for the Federal Government’s proposal to impose a 25% personal income tax on Nigeria’s wealthiest individuals, citing the policy as a potential catalyst for reducing inequality and enhancing national revenue.
If passed by the National Assembly, this tax would apply to individuals earning over N100 million annually and could mark a significant shift in Nigeria’s approach to wealth redistribution.
Mr. Samuel Agbelaye, President of the Chartered Institute of Taxation of Nigeria (CITN), lauded the proposal, describing it as a step toward a fairer and more robust economic system. He argued that Nigeria could draw lessons from countries like Sweden, where top earners pay a minimum tax rate of approximately 45% yet enjoy a high quality of life.
“To revive our economy and transform Nigeria from a potentially great nation to an actualized one, we must take cues from advanced economies that successfully leverage progressive tax systems,” Agbelaye explained.
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He further emphasized that a well-executed tax on the wealthiest Nigerians could fund critical public services that benefit citizens across socioeconomic classes.
Agbelaye added that this policy could foster greater political engagement among Nigeria’s elite, as they would feel more invested in government accountability and transparency in public spending.
“Increasing the tax obligation of wealthy citizens could indirectly lead to better governance, as high-net-worth individuals would demand improved public goods and accountability for their contributions,” he stated.
Supporting this sentiment, former CITN President, Mr. Mc-Antony Dike, endorsed the tax plan as “an equitable approach” to sharing the nation’s financial burden. He emphasized that the wealthy are often beneficiaries of government services and infrastructure and, thus, should contribute a greater share.
Dike dismissed concerns that a high tax rate would discourage the wealthy from maintaining their income levels, noting that “even during economic downturns, high-income earners continue to generate substantial earnings.”
For Dike, this policy could also reduce Nigeria’s dependency on foreign loans by ensuring a more self-sustaining revenue system that funds social programs domestically.
Adding to these perspectives, former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr. Okechukwu Unegbu, proposed broadening the tax base to include not only high-earning corporate executives but also affluent individuals whose wealth is not clearly justified, such as some Pentecostal clergy.
“The government’s decision is well-founded, but to be truly effective, it should encompass all individuals exhibiting extravagant lifestyles without transparent sources of income,” Unegbu said.
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He also stressed the importance of governmental prudence, suggesting that the successful use of these tax revenues to fund essential services would help garner public trust and support for the policy.
At the recently concluded Nigerian Economic Summit, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, reiterated the need for this high-earners’ tax.
He pointed out that 90% of current taxpayers in Nigeria fall within lower-income brackets, arguing that the wealthy, who benefit disproportionately from Nigeria’s economic framework, should contribute more.
Oyedele advocated for a balanced tax system that would alleviate the tax burden on lower-income earners while increasing the contributions of those with substantial earnings.
With these expert endorsements, the proposed tax could reshape Nigeria’s tax landscape, potentially creating a more equitable economy while boosting government revenue for public services.