Presidential Tax Committee Moves to Cut 90% of Local Government Taxes

The Presidential Committee on Fiscal Policy and Tax Reforms has proposed a major constitutional change that would eliminate about 90% of the taxes currently collected by local governments across Nigeria. Committee chairman Taiwo Oyedele announced the plan during the Telecom Compliance Management Forum hosted by the Association of Licensed Telecommunications Operators of Nigeria (ALTON).

Oyedele said the proposal is already before the National Assembly through a constitutional amendment bill aimed at reducing the number of levies imposed on businesses, especially small enterprises. He explained that the current list of local government taxes is long, inconsistent, and difficult for operators to comply with.

He added that the Committee believes local governments should collect only one tax, an approach he said would still generate more revenue than the current system.

Why the Reform Push Matters

Oyedele told industry players that while federal taxes have already been harmonized through new laws, state and local government taxes remain untouched because they are tied to the Constitution. He said a change to the Constitution is the only way to simplify the system, as any law enacted without it “would be null and void.”

He revealed that the amendment bill has passed second reading and is now heading for a public hearing, marking a key step in the effort to restructure how subnational taxes are collected. The telecom sector, he said, is an example of the pressure caused by multiple levies, with operators paying more than 40 different taxes nationwide.

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The reform is expected to address long-standing concerns from businesses that say the fragmented tax structure increases operational costs and slows investment.

Impact on Telecoms and Ongoing Challenges

Earlier at the event, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, said the federal government’s tax reform has already improved the sector. He said the removal of the 5% excise duty and the streamlining of over 56 levies have reduced overlap and created a clearer operating environment. Maida, represented by Executive Commissioner Abraham Oshadami, described the new system as an opportunity for operators to grow while remaining compliant.

ALTON Chairman Gbenga Adebayo also said years of multiple taxation had reduced service quality and increased financial pressure on operators. He noted that the government’s new approach is creating stability and predictability, and added that 2026 will be an important year as telecom companies adjust to the new rules.

The forum later featured discussions on governance, operational efficiency, and compliance, with industry leaders emphasizing the need for responsible tax practices as Nigeria’s digital economy expands.