…Active tax payers in less than 10 Million — Oyedele
… FG posts ₦2.66tn fiscal feficit in Q2 2025 on weak oil revenue
From Rotimi Asher, Lagos and Charles Ebi
Lagos State Governor, Babajide Sanwo-Olu, has assured Nigerians that the Federal Government’s ongoing tax reforms are designed to fix longstanding inefficiencies in the tax system rather than impose additional burdens on citizens, particularly low-income earners and small businesses.
Speaking at the Lagos Tax Reform Summit held in Ikeja, Sanwo-Olu said the reforms would create a fairer, more transparent, and efficient tax system that protects vulnerable groups while ensuring that wealthy individuals and corporations meet their obligations.
Addressing the concerns, Sanwo-Olu acknowledged public apprehension but stressed that the core objective of the reforms was to protect small businesses, eliminate multiple taxation, and close revenue leakages.
“I know some people fear that these reforms will hurt the poor and favour the wealthy. That is simply not true”.
“The goal of the new tax law is simple: protect small businesses, ensure the wealthy meet their obligations, close revenue leakages, and bring more people fairly into the tax system”.
Sanwo-Olu commended President Bola Tinubu for championing the reforms, describing them as bold and necessary steps to overhaul a tax framework that had been ineffective for years.
“These changes are not easy, but the hard part is already giving way to real progress. It takes courage, experience and confidence to fix a system that has been broken for too long”, he said.
Reaffirming Lagos State’s support for the Federal Government’s tax reform agenda, the governor pledged full cooperation in implementing a harmonised tax system that promotes growth, fairness and accountability across all levels of government.
According to him, the reforms are focused on improving efficiency, expanding the tax net, reducing duplication in tax collection, and strengthening trust between taxpayers and government, rather than increasing tax rates.
The summit, themed: “The Lagos Implementation Road Map – From Reforms to Results: Creating a Tax Environment that Works for All”, was jointly organised by the Office of the Special Adviser on Taxation and Revenue and the State Treasury Office.
Sanwo-Olu said Lagos was committed to translating federal tax policies into practical, people-focused outcomes at the sub-national level, with particular attention to small businesses and vulnerable citizens.
The Special Adviser on Taxation and Revenue, Mr Abdulkabir Ogungbo, said the summit underscored Lagos State’s alignment with the federal reform framework.
He disclosed that a state-level committee had been established to work with the Presidential Committee on Fiscal Policy and Tax Reforms, resulting in extensive consultations with ministries, revenue agencies, financial institutions, transport operators and local governments.
Also speaking, the Commissioner for Finance, Mr Abayomi Oluyomi, emphasised the need for synergy between federal and state governments to ensure the successful implementation of the reforms.
“The move from policy to practice requires strong collaboration across all levels of government.
The success of federal tax reforms will directly impact our ability to fund infrastructure, deliver public services and improve the quality of life of our people”, he said.
Chairman of the Lagos State Internal Revenue Service, Mr Ayodele Subair, said the new framework would simplify tax obligations for small and medium-sized enterprises, reduce compliance costs, and protect low-income earners.
Delivering the keynote address, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, said the reforms were aimed at creating a unified, transparent and efficient tax system nationwide.
He noted that standardisation and harmonisation were critical to rebuilding taxpayer confidence and achieving long-term fiscal sustainability, adding that Lagos’ commitment would significantly strengthen national implementation efforts.
However, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has disclosed that the number of active tax-paying individuals in Nigeria is currently less than 10 million, underscoring the need for effective implementation of the ongoing tax reforms.
According to a statement issued by the Special Adviser on Media and Publicity to the Lagos State governor, Gboyega Akosile, Oyedele made the disclosure on Tuesday at the Lagos State Tax Reform Summit held in Ikeja.
On June 26, 2025, President Bola Ahmed Tinubu signed four Tax Reform Bills into law: the Nigeria Tax Act ,NTA, the Nigeria Tax Administration Act ,NTAA,, the Nigeria Revenue Service Act ,NRSA, and the Joint Revenue Board Act ,JRBA.
The new laws represent a comprehensive overhaul of Nigeria’s tax framework, aimed at stimulating economic growth, boosting revenue generation, improving the business environment, and strengthening tax administration across all tiers of government.
Oyedele said the success of the new tax regime would depend largely on accurate and reliable data, noting that while the Federal Government would provide policy direction and harmonisation, states and local governments would be responsible for implementation, administration and service delivery.
According to him, standardising the tax system would move Nigeria away from fragmented and opaque tax practices, while expanding the tax net to ensure fairness and improved compliance.
“In Nigeria today, the number of active tax paying individuals is under 10 million for the whole country. If our people are committed to their tax obligations, that is the number we should have for Lagos State alone based on the population of active workers”, Oyedele said.
Also speaking at the event, Lagos State Governor Babajide Sanwo-Olu said the success of the tax reform journey would hinge on effective implementation at the state level, adding that Lagos had begun readjusting its revenue systems in preparation for the new tax law expected to take effect in January.
Sanwo-Olu dismissed criticisms that the reforms would burden the poor, saying the new tax law was designed to simplify the tax system, reduce multiplicity, block revenue leakages and ensure that wealthy individuals and businesses meet their obligations.
Also speaking, Lagos State Commissioner for Finance, Mr. Abayomi Oluyomi, said synergy between the state and its 57 local governments was critical to achieving the objectives of the reform, stressing the importance of data-driven property enumeration and digital integration.
Chairman of the Lagos Inland Revenue Service, Mr. Ayodele Subair, said the agency had concluded plans for public sensitisation and digital alignment to ensure smooth implementation of the new tax framework across the state.
Meanwhile, the Federal Government recorded a fiscal deficit of N2.66tn in the second quarter of 2025 as total expenditure continued to exceed revenue, according to the Second Quarter and Half-Year Budget Implementation Report released by the Budget Office of the Federation ,BoF.
The report showed that aggregate federal government revenue stood at N5.97tn during the quarter, while expenditure rose to N8.63tn, resulting in the deficit, which was financed largely through domestic borrowing.
According to the BoF, budget execution during the period remained under pressure due to weak, though gradually improving, revenue performance, even as the government continued to prioritise non-discretionary spending obligations.
Aggregate federally generated revenue between April and June 2025 amounted to N5.23tn, representing 58.45% of the prorated target.
Oil revenue performance remained a major drag on fiscal outcomes.
The report disclosed that oil receipts stood at N1.50tn, accounting for 28.5% of total revenue but falling short of the quarterly target by 71.5%.
Average crude oil production during the period was 1.68 million barrels per day, significantly below the budget benchmark of 2.12 million barrels per day, with adverse implications for revenue.
In contrast, non-oil revenue exceeded expectations, supported by improved collections from Company Income Tax, Value Added Tax, Electronic Money Transfer Levy and Education Tax ,TETFund. Non-oil revenue was reported at N8.90tn, representing 85.6% of total revenues and reflecting gains from enhanced compliance, customs automation and improved remittance of independent revenues.
On the expenditure side, aggregate spending, including Government-Owned Enterprises and project-tied loans, amounted to N8.63tn, compared with a prorated target of N13.75tn.
Capital releases to ministries, departments and agencies stood at N393.86bn, while non-debt recurrent expenditure was N2.72tn during the quarter.
Debt service remained a significant fiscal burden, consuming N4.44tn in Q2, which exceeded projections by 24.1%.
The BoF attributed the overshoot largely to rising domestic debt obligations, further tightening the government’s fiscal space.
Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the government remained focused on sustaining capital investment despite mounting fiscal pressures.
He stressed the need to strengthen domestic revenue mobilisation and ensure long-term fiscal sustainability.
Bagudu noted that Nigeria’s economy recorded a real GDP growth rate of 4.23% during the review period, driven mainly by the services and non-oil sectors.
He added that inflation, though still elevated, trended downward to 22.22% , while external reserves declined to $37.82bn amid persistent revenue shortfalls.
The report highlighted continued volatility in oil revenues, noting that production and pricing shocks, as well as structural underperformance, continued to expose fiscal outcomes to downside risks.
While recent administrative reforms boosted non-oil revenue growth, the debt service-to-revenue ratio remained elevated, underscoring the urgency of revenue expansion and expenditure reprioritisation.
The BoF also identified cash management challenges, including delays arising from bottom-up cash planning, which slowed project execution and heightened the risk of cost overruns.
Among its recommendations, the report called for aligning oil production assumptions with verifiable capacity, adopting more conservative oil price benchmarks to build fiscal resilience, deepening tax compliance enforcement, rationalising tax expenditures and accelerating the rollout of e-customs.
It also advocated stronger independent revenue remittance, institutionalisation of value-for-money audits and prioritisation of high-impact projects with measurable economic returns.
