Critics Question Oyedele’s Tax Reform Plans As 2019 Anti-VAT Hike Tweets Resurface

The tweets, where Oyedele opposed a Value Added Tax increase under former President Muhammadu Buhari, have sparked mixed reactions, with critics and supporters offering divergent views.

In 2019, Oyedele criticised then-Federal Inland Revenue Service Chairman, Babatunde Fowler’s plan to raise VAT from 5% to between 7.25% and 8.75%.

He described the proposal as ill-timed and inconsistent with Nigeria’s economic situation.

“Contemplating an increase in VAT rate now is bad timing and inconsistent with current economic reality. VAT rate increase will lead to higher inflation, interest rate hike, more unemployment, and generally make people poorer,” Oyedele tweeted.

He argued that the government’s dual strategy of expanding the VAT net while increasing rates was counterproductive, warning that it could derail efforts to improve compliance and widen the tax base.

According to Oyedele, raising VAT without implementing safeguards such as a registration threshold and zero-rating for basic goods would disproportionately burden small businesses and low-income earners, contravening the 2017 National Tax Policy.

“Nigeria can make twice as much from VAT at the current rate by reforming the law, expanding the net, and ensuring robust administration rather than by increasing the rate,” he said.

Fast forward to 2024, Oyedele’s committee has recommended a progressive VAT increase from 7.5% to 15% by 2030 under the proposed Tax Reform Bills.

This recommendation has drawn criticism, with many accusing him of contradicting his earlier stance.

A social media user, Saleem Bawa, called out Oyedele for the perceived inconsistency, tweeting, “This is the same Tax Messiah championing the tax reforms under BAT, proposing a VAT increase to 10%, 12%, and 15%, but strongly opposed the increase from 5% to 7.5% under Buhari, saying it’s bad timing. So, which was a better time—Buhari’s 2019 or BAT’s 2024?”

However, another user, @Sirjarus, defended Oyedele, arguing that critics were isolating the 2019 tweets from their broader context.

“People are quoting this 2019 tweet against Taiwo’s position on VAT raise. Go down that thread and see what he said should be done before VAT rate increase—zero rating of basic consumption. Now, he has the opportunity, and he is proposing both. There is nothing contradictory here,” he tweeted.

Speaking during a meeting in May, Oyedele defended the VAT hike proposal, emphasising measures to protect vulnerable groups and businesses.

“So we therefore need to adjust the VAT rate upward. We would ensure that it doesn’t affect businesses. The only thing is to look at basic consumption from food, education, medical services, and accommodation, which will carry zero percent VAT,” he said.

Despite these assurances, the legislation has faced backlash over concerns about timing, revenue derivation, and public acceptance.

Borno State Governor, Babagana Zulum, in a television interview on Monday, argued that the reform would disproportionately benefit states like Lagos and Rivers while impoverishing others, particularly in the North.

“The bill will only benefit Lagos and Rivers States while impoverishing others, especially the northern region,” Zulum said.

In a counterstatement, the Presidency, through the Special Adviser to the President on Information and Strategy, Bayo Onanuga, dismissed Zulum’s claims. Onanuga insisted that the Tax Reform Bills aim to improve the quality of life for Nigerians, especially the underprivileged.

“These reforms are designed to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living,” he stated.

... Critics Question Oyedele’s Tax Reform Plans As 2019 Anti-VAT Hike Tweets Resurface Read More on ... TheNigeriaLawyer.