Tax Reform: Presidential Committee Seeks 90% Cut in Local Govt. Taxes

The Presidential Committee on Fiscal Policy & Tax Reforms is seeking a constitutional amendment that will eliminate 90% of taxes currently being collected from businesses by local government authorities across Nigeria.

Chairman of the Committee, Taiwo Oyedele, disclosed this on Tuesday during the Telecom Compliance Management Forum organized by the Association of Licensed Telecommunications Operators in Nigeria (ALTON).

According to Oyedele, this proposal is being pushed through a constitutional amendment bill currently before the National Assembly.

Oyedele noted that local governments across Nigeria collect several taxes, which affect businesses and even make it difficult for small businesses to grow.

“So, one thing we’ve done in our proposal to the government is we’ve taken the exclusive legislative lists, concurrent lists, and the full schedule, and proposed amendments to them.

“For local government, we removed like 90% of the taxes they have there. We actually think that local government should collect only one tax, and they can make 10 times what they are making now,” he said.

Need for constitutional amendment

Speaking against the backdrop of the over 40 taxes being paid by telecom operators across Nigeria, Oyedele said the Committee has been working on harmonizing the various taxes, but has only succeeded with federal taxes.

“We’re still harmonizing because harmonizing taxes is not easy. In the new tax laws we’ve enacted, we’ve harmonized taxes that are collected for the federal government.

“But the ones collected by state and local government, we could not harmonize by enacting a law, because the powers to collect those taxes are in the Constitution,” he said.

According to him, this necessitated the need for a constitutional amendment because anything done outside the constitution will be null and void.

He noted that the proposals to the National Assembly for the constitution amendment have passed second reading, and the lawmakers are now planning a public hearing for it.

Tax reform in telecom sector

Speaking earlier, the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Dr. Aminu Maida, said the federal government’s tax reform has been impacting the telecom sector positively.

According to him, the reform led to the abolition of 5% excise duty and streamlining of over 56 disparate levies.

This, he said, has shifted the telecom sector from multiple overlapping taxes that inflate operational costs and investments.

Maida, who was represented by NCC’s Executive Commissioner, Technical Services, Abraham Oshadami, said the new tax regime presents a unique opportunity for operators to become partners in national development while simultaneously strengthening their own competitive position.

“Having telecom sector contributing 9.52% to GDP in quarter 2 of 2025, and serving 140 million Internet users, we must now embrace greater responsibility in compliance and governance.

More insights

In his opening address, ALTON Chairman, Engr. Gbenga Adebayo said the government’s tax reforms are already helping to dismantle one of the industry’s longest-standing challenges, multiple taxation.

“For many years, our sector faced over 50 different taxes and levies across Federal, State and Local Government levels. These imposed severe burdens on operators and directly affected the quality of services delivered to consumers,” Adebayo said.

According to him, the government’s new tax policy direction simplifies compliance, promotes equity, and creates a predictable environment.