The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Tuesday said Nigeria can no longer depend primarily on borrowing to finance its development needs, stressing the urgency of building a sustainable fiscal system to support key sectors of the economy.
Oyedele made the remarks while addressing participants at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria in Abuja.
“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection,” he said.
The minister’s comments came less than 24 hours after reports emerged that the Federal Government had stepped up discussions with the World Bank over a proposed $1.25bn loan aimed at advancing economic reforms, boosting job creation and enhancing competitiveness.
He added that sustainability goes beyond revenue generation to include driving economic growth, reducing inequality, protecting vulnerable groups and fostering productivity.
According to him, the Federal Government’s ongoing tax reforms are aimed at making the economy more attractive to investors while strengthening fiscal stability.
Oyedele noted that the reforms became imperative due to longstanding structural weaknesses in Nigeria’s tax system, such as multiple taxation, fragmented administration, weak compliance and an overreliance on a narrow revenue base.
“Businesses faced overlapping debts, unpredictable enforcements, and rising compliance costs. Citizens often perceived the tax system as unfair because the burden was unevenly distributed,” he said.
He noted that the situation had become untenable, as government revenues were still inadequate to meet the country’s development demands.
The minister said the reforms are intended to lay a stronger fiscal foundation for long-term national development, rather than introduce changes for their own sake.
“Our approach is guided by a simple principle: a good tax system should raise revenue efficiently, support economic growth, protect the vulnerable, and strengthen trust between governments and citizens,” Oyedele said.
He explained that the reforms are designed to simplify the tax system, enhance fairness, attract investment and reduce economic distortions.
Oyedele also revealed that minimum wage earners have been exempted from personal income tax under the ongoing reforms, while tax burdens on low- and middle-income earners have been eased.
On corporate taxation, he said the government is proposing cuts to companies’ income tax rates to enhance Nigeria’s appeal as an investment destination.
Oyedele added that the government is also modernising the Value Added Tax framework by expanding input VAT credits and providing clearer exemptions for essential goods and services.
“This reduces cost buildup within the economy and improves efficiency across the value chain. This also helps to moderate inflation,” he said.
