The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has raised concerns about the potential implications of the external revenue service announced by U.S. President Donald Trump. Oyedele cautioned that this move could further complicate the global tax system.
He shared his views on his X (formerly Twitter) handle on Monday night, January 20, 2025, following Trump’s inauguration. Oyedele has been at the forefront of Nigeria’s tax reform efforts.
According to Oyedele, the establishment of Trump’s external revenue service poses a threat to global trade.
During his inauguration, Trump unveiled his vision for the service, stating, “Instead of taxing our citizens to enrich other countries, we tariff and tax other countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties, and revenue. It will be a massive amount of money pouring into our treasury coming from far.”
Reacting to Trump’s announcement, Oyedele noted, “The 47th President of the United States, Donald J. Trump, announced plans to impose tariffs and taxes on other countries. This move could disrupt international trade and further complicate the already complex global tax system, highlighting the importance of our ongoing tax reforms.”
He added that Nigeria’s revamped tax system would help the nation navigate potential challenges while also capitalizing on opportunities created by this development.
Meanwhile, on October 3, 2024, President Bola Tinubu forwarded four tax reform bills to the National Assembly: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
The introduction of these bills has ignited debates concerning equity, implementation, and economic impact, particularly in Northern Nigeria.
Despite the controversies, the Nigerian Governors’ Forum (NGF) endorsed the bills last Thursday, advocating for a revised Value Added Tax (VAT) sharing formula to promote equitable resource distribution among states.
The proposed formula allocates 50% based on equality, 30% based on derivation, and 20% based on population. Oyedele has expressed support for this revised approach, emphasizing its potential to foster greater equity in resource distribution.
