Oyedele says Nigeria cannot achieve development through borrowing.

Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said on Tuesday that Nigeria can no longer depend primarily on borrowing to finance development, emphasizing the need for a sustainable fiscal system that can support the economy’s critical sectors.

He made the remarks during the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria held in Abuja.

His comments followed a report published a day earlier that the federal government had deepened talks with the World Bank on a new $1.25 billion loan intended to back economic reforms, job creation and competitiveness.

“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.

Oyedele noted that fiscal sustainability involves more than revenue generation; it also requires fostering growth, narrowing inequality, protecting vulnerable groups and boosting productivity.

He explained that the government’s ongoing tax reforms aim to make the economy more attractive to investors while strengthening fiscal sustainability.

The minister said the reforms are needed because Nigeria’s tax system has long suffered from structural weaknesses such as multiple taxation, fragmented administration, weak compliance and over‑reliance 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 added that the situation had become untenable as government revenues remain insufficient to meet the country’s development needs.

The reforms, according to Oyedele, are intended to build a stronger fiscal foundation for long‑term national development rather than to 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,” he said.

He said the reforms seek to simplify the tax system, improve fairness, encourage investment and reduce economic distortions.

Oyedele also disclosed that minimum‑wage earners have been exempted from personal income tax under the reforms, and that the tax burden on low‑ and middle‑income earners has been reduced.

On corporate taxation, he said the government is proposing lower income‑tax rates for companies to enhance Nigeria’s attractiveness as an investment destination.

He further explained that the government is modernising the Value Added Tax framework by expanding input VAT credits and clarifying 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.

The minister lamented the multiple taxes and levies that businesses face, and said the government is working with sub‑national authorities to harmonise taxes and lower compliance costs.

He noted that 15 states have already enacted tax‑harmonisation laws and urged other states to follow suit.

Oyedele stressed that technology will play a central role in the future of tax administration in Nigeria.

“We are therefore prioritising data integration, automation, digital filing systems, and a technology‑driven compliance framework,” he said.

The minister acknowledged that challenges remain, including weak institutional capacity, limited integration of the informal sector and issues of public trust.

Also speaking at the conference, Vice‑President Kashim Shettima defended the federal government’s tax reforms, describing them as pro‑people and pro‑business policies aimed at lifting millions of Nigerians out of poverty and positioning the economy for sustainable growth.

Represented by the Special Adviser to the President on Economic Affairs in the Office of the Vice‑President, Dr Tope Fasua, Shettima said the Tinubu administration envisions an economy where ordinary Nigerians can prosper regardless of social background.

He added that the administration is working to make Nigerian‑made products globally competitive while transforming the country’s tax administration into a benchmark for Africa.

The Vice‑President acknowledged that public scepticism and misinformation about the reforms constitute one of the biggest hurdles.

“Many Nigerians simply cannot believe it because it has never happened before,” he said, insisting that President Bola Tinubu is neither anti‑business nor anti‑people, but committed to creating an environment where Nigerians can thrive.

Shettima also stressed the need for aggressive public sensitisation on the reforms.

He described tax reform as more than a fiscal policy exercise, calling it “an act of patriotism” that can lay the foundation for national prosperity.

Earlier, the 17th President and Chairman of the Council of the Chartered Institute of Taxation of Nigeria, Innocent Ohagwa, called the newly introduced tax regime the most comprehensive overhaul of Nigeria’s fiscal structure in more than three decades.

Ohagwa said the reforms align with the administration’s ambition of growing Nigeria into a $1 trillion economy by the end of the decade.

He noted that the country has historically struggled with weak revenue generation and excessive dependence on borrowing, but argued that the ongoing reforms are beginning to reverse that trend.

According to him, Nigeria’s revenue‑to‑debt‑servicing ratio, which stood at 120 percent in December 2022, fell to 68 percent by the end of 2025.

Ohagwa said broadening the tax base and simplifying the tax code would help Nigeria transition “from a nation that borrows to survive to one that invests to thrive.”

He added that the reforms would also help curb illicit financial flows, reduce informality in the economy and strengthen accountability by improving the National Revenue Service’s technological surveillance.

Meanwhile, Minister of Power Joseph Tegbe praised the reforms, saying the country needs “radical reformers” across all sectors to achieve meaningful development.