Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, yesterday declared that Nigeria’s drive towards fiscal federalism would remain ineffective unless all tiers of government embraced shared responsibility, fairness, and accountability in tax administration.

Oyedele spoke in Abuja at the opening of a national workshop on “Strengthening Tax Compliance in our New Tax Regime: Collaborating with Sub-national Governments for Enhanced Tax Collection.”

He said the country must create an environment where taxpayers contributed fairly while also benefiting from the economic gains generated through improved revenue mobilisation.

Executive Chairman of Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, said the country must build a tax system to ensure broad and equitable contribution from every tier of government to the national revenue pool.

Adedeji said the country could no longer sustain a fiscal structure where some states and government-owned entities benefitted from federally distributed revenues without making commensurate tax contributions.

He said, “We have to be honest about the structural imbalances affecting voluntary tax compliance within our system. Going forward, we must create an environment where every taxpayer contributes fairly to the seed, and everyone can expect to share in the harvest.”

Oyedele stressed that structural imbalances within the nation’s tax system had continued to weaken voluntary compliance, stating that the new tax regime is designed to build a fairer and more sustainable fiscal framework for national development.

The minister said the success of the country’s new fiscal direction would depend largely on effective collaboration among the federal, state and local governments as well as public institutions responsible for revenue administration.

According to him, the ongoing tax reforms are part of broader structural adjustments aimed at repositioning the economy away from dependence on volatile revenue sources towards a stable and equitable tax-based system.

He stated that the reforms were being implemented alongside major economic measures, including the floating of the naira, fuel subsidy removal, and inflation-tightening policies, all targeted at restoring macroeconomic stability despite prevailing socio-economic pressures.

Oyedele stated, “We are not here to just talk about administrative rules and regulatory guidelines; we are here as state actors to actively think on implementation of the new tax reforms and shape our fiscal architecture to provide sustainable funds required to address our pressing socio-economic challenges, promote economic growth, and development of our dear country.”

Oyedele said taxes remained the foundation of the social contract between government and citizens, adding that efficient tax collection is critical to funding of infrastructure, healthcare, education, and national security.

He pointed out that the new fiscal framework sought to expand the tax net without necessarily increasing the burden on taxpayers while also deploying technology to block leakages and improve compliance.

The minister emphasised the need for policy alignment among the federal government, sub-national administrations, and government-owned enterprises to ensure prompt remittance of withheld taxes and improved institutional coordination.

According to him, “To foster an efficient tax ecosystem, it is essential to reinforce cooperation through information exchange, harmonized processes and mutual accountability.”

He described the workshop as an important platform for stakeholders to address operational challenges, exchange ideas and develop practical strategies to accelerate revenue growth across the country.

Oyedele urged participants to approach the engagement with a spirit of partnership and collective responsibility, expressing confidence that stronger collaboration would help Nigeria build a resilient tax system capable of driving fiscal sustainability, restoring public confidence, and supporting long-term national development.

Adedeji, who was represented by NRS Executive Director, Finance and Corporate Services Directorate, Mr. Muhammad Lawal, stated, “True fiscal federalism cannot be a one-way street, for it can only flourish on the basis of shared commitment and mutual accountability.”

He warned that persistent compliance imbalances among states and government-owned enterprises were undermining institutional fairness and weakening the nation’s broader compliance culture.

He also disclosed that the service would beginning this year, introduce a performance-based recognition initiative for states demonstrating outstanding tax compliance.

According to him, “We have reports about the imbalance in compliance existing among states and GOEs, which does great damage to institutional fairness, undermines the broader compliance culture and unfairly burdens compliant states.

“There must be a change in this story going forward, as every level of government has to do its part responsibly to contribute to the national revenue pool that we all draw from.”

Adedeji said the workshop, organised by Government Business Group under the Government and Large Taxpayers’ Directorate, was part of the agency’s broader strategy to deepen collaboration with sub-national governments and improve tax collection efficiencies across the federation.

He said NRS was under enormous pressure to deliver about N40 trillion in tax revenue this year, describing the target as critical to Nigeria’s fiscal stability and economic sovereignty.

He stated, “The stakes are higher this year as the NRS is faced with the Herculean task of raising about N40 trillion in tax revenue for the federation.

“Meeting this ambitious goal will require a laser-like focus on capacity building and enabling deep collaboration between our internal teams and state actors.

“There is no compromise on our ability to perform at the highest level because our mission is inextricably linked to the stability of the nation and economic sovereignty.”

Adedeji added that revenues collected by the service were the financial lifeblood of the three tiers of government and were essential for financing infrastructure, healthcare, security and other developmental projects.

The NRS chairman stated, “Our goal is to move away from enforcement-dependent approach and move to a collaborative, voluntary compliance framework where every institutional stakeholder contributes its fair share to our collective national prosperity.”

Adedeji said the reforms would help reduce transition anxieties surrounding the implementation of the new tax laws while establishing direct communication channels to resolve structural bottlenecks affecting tax administration.

In her remarks, Executive Director, Large Taxpayer and Government Directorate, NRS, Mrs. Amina Ado, said findings from the service’s monitoring and audit operations revealed major leakages in the prompt deduction and remittance of Value Added Tax (VAT) and Withholding Tax (WHT) by some government institutions.

Ado said the existing compliance gaps had distorted the country’s fiscal federalism and created inequities among states.

She stated, “Whereas some jurisdictions work hard to fill the national revenue pool, others participate in the distribution without making their fair contribution, this compliance gap distorts and creates an imbalance in our fiscal federalism.”

Ado stressed that enhanced cooperation, information sharing, and coordinated tax administration had become indispensable to sustainable revenue growth and national development.

She added that NRS was committed to building technologically-driven and transparent remittance systems that would simplify compliance and reduce friction between tax authorities and institutional taxpayers. (THISDAY)

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