Taiwo Oyedele clarified that Nigeria’s upcoming tax bills will not reintroduce inheritance tax, focusing on income tax implications instead. Claims of investment withdrawals from free zones were dismissed, indicating a stable economy. The government seeks to maintain fairness in taxation through proposed reforms, including reduced corporate tax incentives for manufacturers, addressing both tax structure and economic stimulation.
Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, affirmed that inheritance tax will not be introduced in the new tax bills before the National Assembly. “The section of the law being interpreted as introducing inheritance tax is Section 4, Subsection 3 of the Nigerian tax bill, which addresses family income,” he stated during a public hearing hosted by the House of Representatives Committee on Finance, chaired by Hon. James Faleke.
Oyedele clarified that income generation through property rental, whether by individuals or families, is distinct from inheritance. Tax on rental income is applicable regardless of ownership structure, and exempting rentals would lead to tax evasion through misclassification of property status. “Income is different from inheritance, which pertains to assets and wealth,” he emphasized, reiterating that the law aims to clarify income taxation rather than introduce inheritance tax.
He noted that current tax provisions regarding income are rooted in existing legislation since Nigeria’s independence, including stipulations in the Personal Income Tax Act. Families earning income are taxed based on attribution to individual members, or collectively if unspecified. Historical laws from 1979 and the repeal of inheritance tax in 1996 clarify that there are no current attempts to reestablish such a tax on estates.
Regarding claims of investment withdrawals in free zones due to adverse policies, Oyedele refuted these allegations as misleading. He explained that approximately four trillion naira circulates physically, primarily for minor transactions, contrasting this with the overall money supply exceeding 100 trillion naira. He cited substantial digital transaction volumes indicating robust economic activity.
Zach Adedeji, the Chairman of the Federal Inland Revenue Service (FIRS), criticized entities in free zones that sell products in customs areas while benefiting from tax advantages. He stated that a responsible government must prevent unfair competition between businesses that pay taxes and those that exploit regulatory loopholes, warning against potential economic distortions.
Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), welcomed the proposed reforms but expressed concern over insufficient incentives for exporters. He advised against allowing unrestricted sales from free zones into local markets, advocating a cap of 25% on such transactions to protect domestic industry. He also endorsed plans to reduce corporate income tax to promote economic growth, noting that this strategy is globally recognized for enhancing production efficiency.
The discussions on Nigeria’s tax reform bills reaffirm the government’s intention not to reintroduce inheritance tax, focusing instead on income taxation clarity. Oyedele and other officials addressed concerns regarding investment stability amid critical policy changes. Furthermore, the emphasis on structured taxation in free zones and support for corporate tax reduction reflects an effort to balance government revenue needs with economic development. Overall, the tax reforms signal a commitment to transparency and an improved fiscal environment for business operations.
Original Source: www.zawya.com
