Tinubu’s Tax Reforms Bill Will End Multiple Taxation- Financial expert

A financial expert, Babatunde Salami, has expressed the optimism that the new tax reform bills of the federal government would help to solve the perennial problem of multiple taxation.

He added that the reform, if accorded wider stakeholders engagement and greys areas of concern addressed and acceptability, would increase tax net and base in the country.

Salami, a former regional manager at First Bank PLC, who spoke in an interview in Ilorin, Kwara State Capital, described the new reform as progressive, saying that it would make those that earn less than N1 million to be tax exempt and those that earned above N1million and higher to pay tax on progressive basis from 7% to 24% .

He explained that the new tax bills would also provide avenues for Smaall Scale businesses that earned less than N50 million to be tax-exempt stressing that this would allow Smal scale businesses and companies to thrive in the country.

He said, “For individuals that are earning less than N1 million annually, you are exempted from paying tax, and progressively, if you go above N1million, then your tax will start from 7% upward. For companies who will earn less than N50 million annually, they are also exempted from paying tax. This is to provide avenues for companies to continue to thrive in the country.

“We will no longer have the perennial problem of multiple taxation as everything will now be unified rather than different entities doing the collection.

“Nigeria is getting only 6% of tax from commercial activities in the country compared to South Africa, which is 22%. The new reform will help to increase the tax base. “

Cash shortage

On the raging acute shortage of cash in the country, the financial expert blamed the Central Bank of Nigeria (CBN) for lacking proactiveness to control the situation.

He said, “The CBN is to be blamed. They are the supervisory organ and they need to be proactive by visiting banks to see what is truly going on themselves. They can ask the banks to open their respective vaults and check if they are hoarding cash or not. The CBN, as the supervisory organ, needs to sanction the banks that are found to be hoarding cash. He says, of what benefit would it be for any commercial bank for not wanting to satisfy their teeming customers with cash when customers come for their cash withdrawals

“The CBN keeps saying that if we don’t get note we should call them and they will try to understand why the bank couldn’t give their customers money but we learnt that the banks always go to CBN to request for cash but they don’t get any”, he said.

Similarly, in his view, the President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions, Olusoji Oluwole, attributed the growing cash shortage across the country to the CBN’s failure to meet commercial banks’ cash demands.

However, in a statement recently released by CBN, the Apex Bank blamed the cash scarcity on the rise in cash held outside bank vaults, which have risen by N1.59 trillion year-on-year riseN4.29 trillion.

The bank said over 90 per cent of the currency in circulation has remained outside formal financial institutions in 2024.

The data showed that by October 2024, currency outside banks had reached N4.29 trillion, making up 94.3 per cent of the total N4.55 trillion in circulation.

This marks a notable year-on-year increase of 59 per cent or N1.59 trillion, rising from N2.70 trillion in October 2023, when 89.6 per cent of the total currency was outside banks.

Salami, however, urged the authorities to help rescue the citizens from the untold hardship they are facing, saying, “This cash scarcity is only bringing unnecessary hardship on Nigerians and they have nothing to benefit from it not even in the long run”.

On the concerns raised about the new regime of bank transfer charges, the financial expert said, “Nigerians are beginning to pay more taxes either directly or indirectly. Most of these charges don’t stay in the bank, they go to the Federal Government”.

Salami, who also spoke on the effect of poverty on the consumption culture of the Northern States, described the situation as “poverty of the mind” and blamed the political leadership in the region for lack of vision.

He said, “What is in existence in the North is the poverty of the mind, most especially on the part of the leaders (Military, Political and religious leaders) who are unable to look inward before now. During the time of Ahmadu Bello and Tafawa Balewa, North was a predominant productive region, but since then, things have gone haywire.

“Lack of vision of leadership in the North, all they care about is coming into office and doing as they pleases without any plans for the people in their respective states, whereas there are steps to be taken”, he said.

Olusola Akintonde