Nigeria's economic reforms stabilizing nation, says revenue chief

Nigeria's top tax official has staunchly defended President Bola Tinubu's economic overhaul, arguing that removing fuel subsidies and unifying the foreign exchange market are crucial steps toward stabilizing the nation's economy. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), asserted that the administration deserves praise, not criticism, for these bold measures.

In a television interview, Adedeji explained that the Tinubu administration inherited an economy crippled by an unsustainable fuel subsidy regime, a non-transparent foreign exchange market, a struggling oil sector, and a narrow tax base. He presented the subsidy removal and FX market unification as integral parts of a broader strategy to bring economic order.

Adedeji pointed to several indicators he believes demonstrate the reforms' positive impact. He noted a significant jump in domestic refining capacity, from 30,000 barrels per day to 700,000 barrels per day. Government revenue, he added, has surged from approximately 12 trillion naira to 40 trillion naira, a rise attributed to improved collection and wider economic reforms. "We are taxing prosperity, not poverty," Adedeji stated, explaining that increased business profitability will ultimately lead to higher government revenue.

The NRS chairman also defended the government's tax reforms, asserting they are designed to expand the tax base and enhance the business environment. He highlighted that about 90% of Value Added Tax (VAT) revenue goes to state governments, suggesting these reforms strengthen sub-national finances. Furthermore, Adedeji mentioned government initiatives to tackle structural economic impediments, such as improving electricity supply, education, infrastructure, and access to credit, citing the Electricity Act as an example of reform aimed at boosting investment and state participation in the power sector.

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We are taxing prosperity, not poverty.