Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has declared that the savings from Nigeria's removal of fuel subsidies since 2023 are grossly inadequate to meet the country's huge development requirements.
Speaking during a capacity-building training on the Nigeria Tax Act (2025) for State House Press Corps members in Abuja, Oyedele emphasized the need for comprehensive tax reforms to reposition Nigeria's economy for sustainable growth.
He disclosed that Nigeria's total annual budget covering the federal government, 36 states, the Federal Capital Territory (FCT), and all 774 local government areas is less than $50 billion, a grossly insufficient figure for a population exceeding 200 million.
“Even if you remove corruption and waste completely, the resources at our disposal are not enough to transform Nigeria. Subsidy savings alone cannot deliver the level of infrastructure and services required. Our fiscal space is simply too small,” Oyedele stated.
Oyedele also lamented the collapse-risk the subsidy regime posed, highlighting that the Nigerian National Petroleum Company Limited (NNPC) had withheld remittances and used future crude production as collateral to finance petrol imports.
Regarding the much-discussed 5% fuel surcharge, Oyedele clarified it is not a new tax but a longstanding provision under the Federal Roads Maintenance Agency Act since 2007, now integrated into the new Nigeria Tax Reform Law with transparency safeguards. The surcharge will only take effect upon a formal commencement order by the Finance Minister.
He noted that many countries levy fuel-related charges to fund road infrastructure, an area where Nigeria lags significantly its infrastructure-to-GDP ratio stands at around 30% compared to South Africa’s 85%. Oyedele stressed that dedicated funding for infrastructure is vital, as subsidy savings alone can't bridge the gap.
Oyedele reassured the public there would be no new tax IDs introduced, as existing National Identification Numbers (NIN) and Bank Verification Numbers (BVN) will serve as tax identification under the harmonized system, aimed at simplifying tax administration.