The recent move by the federal government to reform Nigeria’s tax system, as reflected in the four bills sent to the National Assembly, while a good fiscal move, comes when citizens face economic hardship.
Development Diaries reports that the bills, which incorporate proposals from the Presidential Fiscal Policy and Tax Reforms Committee, aim to amend existing laws and open new revenue streams.
According to media reports, President Bola Tinubu believes that by targeting legislative backing for tax reforms, the government will bolster its fiscal base, particularly in light of growing public expenditure needs and mounting debt obligations.
However, this move comes when citizens’ disposable income is shrinking, a concern echoed by many economic experts.
The rising cost of energy, the cost of petrol, inflation, and the dwindling value of the naira have significantly strained household finances.
Many Nigerians are grappling with higher food, transportation, and housing costs, eroding their purchasing power.
Introducing new taxes or increasing existing ones could worsen these challenges, deepening public discontent and economic hardship.
The timing of these tax reforms is therefore critical.
While increased revenue is essential to fund public services and infrastructure development, a delicate balance exists between raising taxes and safeguarding citizens’ welfare.
With these economic realities, there are concerns about how additional tax burdens, if not carefully implemented, might deepen the financial difficulties of the populace.
With inflation already at high levels, further taxation could reduce consumer spending, dampen economic growth, and potentially widen the gap between the government and the people.
Ultimately, the success of these reforms will depend on their implementation. If the government can channel the additional revenue towards tangible improvements in public services, infrastructure, and social welfare, it may help mitigate the negative effects on citizens.
Development Diaries calls on the National Assembly to review the bills to ensure that they do not further reduce the purchasing power of Nigerians and dampen economic growth.
We also call President Tinubu to ensure transparency in how already existing taxes are used, and also show efforts to address inflation and stabilise the naira, as this will be crucial in ensuring that these tax reforms do not unduly burden the populace.
