Tax Reform Creating Environment For Economic Prosperity – Adedeji

The Executive Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, has said that Nigeria tax system is build on taxing prosperity not poverty.

He dismissed the insinuation that the government’s tax reform is aimed at extracting money from Nigerians . He said the essence of reform is creating an economic environment where individuals and businesses can prosper.

Dr. Adedeji made the clarifications on Sunday night while appearing on Channels Television’s Politics Today, where he defended the administration’s tax reforms and addressed concerns over rising government revenue amid the economic hardship facing Nigerians.
According to him, the government’s objective is to tax the fruits of investment rather than the investment itself.

“For us at Nigeria Tax, we are not there to extract. Our focus is not revenue. I don’t want to tax poverty. I’m to tax the fruit, not the seed, and I’m to tax the return, not investment.”
Adedeji explained that the government would generate more revenue as businesses became more profitable, without necessarily increasing the tax burden on individuals and companies.

He said a company that made N100 in profit could generate N30 in tax revenue for the government, but if its profit increased to N200 or N300, government revenue would rise accordingly.

“So, if I want to make more, I must work for you to make more. And that is why it is in the best interest of us in Nigeria Revenue Service that businesses are doing well, individuals are doing well,” he said.

He said the approach was consistent with President Bola Tinubu’s economic agenda, which seeks to remove barriers to investment and create a more conducive environment for businesses to operate and expand.
Power Sector Reforms

Adedeji cited reforms in the electricity sector as part of the government’s efforts to stimulate economic activity.

He noted that the Electricity Act had devolved powers to state governments to generate, transmit and distribute electricity, arguing that improved power supply would boost production and productivity across the economy.

According to him, electricity remains critical to industrialisation because Nigeria’s economic challenges are partly linked to its inability to produce enough of the goods and services it consumes.

States Have Role in Poverty Reduction
The NRS chairman also said poverty reduction could not be achieved through Federal Government interventions alone, stressing the role of state governments in providing basic services such as primary healthcare and education.

He described education, from the early years through primary and secondary school, as one of the most effective tools for lifting people out of poverty and improving citizens’ earning capacity.

Revenue and Infrastructure Spending
Adedeji also defended the government against criticism over increased revenue collection amid concerns about delays in budget implementation and capital expenditure.

He argued that revenue generation, budgeting, funding and financing were distinct components of public financial management and should not be treated as the same thing.

According to him, some major infrastructure projects are being implemented through financing arrangements involving government contributions and private-sector participation.

He cited the Lagos-Calabar Coastal Highway and the Sokoto-Badagry Superhighway as examples of projects supported through such arrangements.

Adedeji said growing confidence in the Nigerian economy had encouraged private investors and contractors to participate more actively in financing major infrastructure projects.

He added that increased government revenue was also supporting interventions in agriculture and industrial development through institutions such as the Bank of Agriculture and the Bank of Industry.

Rejecting claims that increased revenue was not translating into development, he said the funds were being channelled into infrastructure, agriculture, industrial development and other areas of government spending.

“When you ask where the increased revenue is going, it is going into a structure,” he said.
Government Targets Budget Reforms

The NRS chairman acknowledged concerns over Nigeria’s budgeting process, saying the Tinubu administration had identified structural weaknesses in the system and was working to address them.

He said the President had indicated that his administration would no longer tolerate the continuous rollover of budgets, describing budget reform as an important part of the government’s broader economic transformation agenda.

Adedeji further argued that governance should be guided by established principles, procedures and sound financial management rather than emotion.

He said the ultimate goal of the government’s economic policies was to create conditions that would allow businesses to expand, individuals to earn more and the country’s tax base to grow.
Reiterating his position, Adedeji said, “Tax prosperity, not poverty,” stressing that a sustainable revenue system would depend on economic growth and increased productivity rather than excessive taxation.

He expressed optimism about Nigeria’s economic outlook, saying the country’s future remained “very bright” as the ongoing reforms seek to address the fundamental challenges facing the economy.