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Exorbitant increase in taxes by the Federal Government may further deepen the poverty line and impede the employment drive in the country.
Victor Akidi, Economist and National Secretary of the Nigerian Economic Society (NES), in a chat with newsmen during the induction ceremony for new members of the Nigerian Economic Society (NES) held at the Rivers State University (RSU), Port Harcourt, said high taxation would drastically impact the poor and the unemployed in the country.
He rather called for a reduction in tax rates, expansion of the tax base and the establishment of enabling environment for businesses to create jobs.
This came against the backdrop of what Taiwo Oyedele, Chairman, Presidential Fiscal Policy and Tax Reform Committee, suggested, saying at least nine out of every ten Nigerians might not pay the Pay as You Earn (PAYE) tax.
Akidi said if plans by the Federal Government to impose taxes on bank account holders and petrol consumption tax were implemented by 2026, the unemployed persons in the country would likely go further into the poverty line.
He called for improved and stable ease of doing business initiatives in the country and reduction in tax rates.
Akidi urged the creation of enabling environment for the tax base to increase, explaining that it would accommodate companies that endeavour to create jobs in the country.
“The totality of it is that the ease of doing business conditions must be improved, tax rate cut, and insecurity reduced. By so doing, among others, the economy through productive activities, including diversification of oil revenue and creating employment, the standard of living of citizens will improve,” he said.
He however disagreed with the data used by the Nigerian Bureau of Statistics (NBS), concluding that unemployment had been reduced in the country, describing such as not based on reality.
The economist wondered how a person earning N3,000 per day, could be categorised as “a fully employed person,” pointing out that such temporary income cannot take care of the basic needs of the individual and his family.
“How does it up. What if in other days or weeks, there is no work for him”, he said.
He contended that by the indices of poverty, which indicate that anyone earning below $2 dollar per day is considered to be within the poverty line, the N3,000 earned by the worker cannot fetch him a day’s meal.
Akidi noted that such persons’ standard of living cannot be considered to have improved, adding that earnings must be tied to individual’s standard of living considering the level of inflation which devalues the market capacity of amount earned.
“What is the inflation level and how do we put that side by side with the standard of living. If there is no improvement in the daily or monthly earnings of the individual, the inflation is already eroding the market purchasibility of those earnings and the end results is that we are further going into high level of poverty,” he said.
Akidi while acknowledging that parameters are improving, however advocated for inclusive people participation in government policy formulation and implementation as part of improving the productive parameters of the economy and the standard of living in the country.
He also called on the government to implement a market-friendly interest rates that would enable investors to have the capacity to easily borrow from the financial institutions for employable investments, adding that with improved ease of doing business and reduced tax rates, employment generation in the country will improve.
Taiwo Oyedele, Chairman, Presidential Fiscal Policy and Tax Reform Committee, who spoke at the Nigerian Economic Summit (NES31) in Abuja on Tuesday, pointed out that at least nine out of every ten Nigerians would no longer have to pay the Pay as You Earn (PAYE) tax.
Oyedele emphasied that the new tax laws are targeted at protecting the low income earners or those at the poverty line.
“That is about 33% of workers in the public and private sector combined, will no longer pay PAYE, because they will be exempted. The remaining 2% plus will pay more,” he said.
President Bola Tinubu, in June 2025, signed the four Tax Reform Bills into law. These laws include the Nigeria Tax Act (NTA), The Nigeria Tax Administration Act (NTAA), The Nigeria Revenue Service Act (NRSA) and the Joint Revenue Board Act (JRBA).
