Taiwo Oyedele warns that Trump’s proposed External Revenue Service could disrupt global trade, urging Nigeria’s tax reforms to adapt to new challenges
Taiwo Oyedele, Chairman of Nigeria’s Presidential Committee on Fiscal Policy and Tax Reforms, has expressed concerns over the potential disruptions to global trade following the announcement of the United States’ External Revenue Service by President Donald Trump.
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The proposal, announced during Trump’s inauguration, suggests imposing tariffs and taxes on other countries to generate revenue for the US, a move that could have far-reaching implications for international commerce.
During his inauguration speech, Trump laid out his vision for the new service, stating, “Instead of taxing our citizens to enrich other countries, we tariff and tax other countries to enrich our citizens.
For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties and revenue. It will be a massive amount of money pouring into our treasury coming from far.”
Reacting to this bold announcement, Oyedele warned that Trump’s plan could disrupt established global trade patterns and complicate the already complex international tax system.
In a post on his X handle, Oyedele emphasised the importance of Nigeria’s ongoing tax reforms in adapting to these changes.
“The 47th President of the United States, Donald J. Trump announced plans to establish an External Revenue Service to impose tariffs and taxes on other countries.
This move could disrupt international trade and further complicate the already complex global tax system, highlighting the importance of our ongoing tax reforms,” Oyedele wrote.
Oyedele also highlighted how Nigeria could better navigate these challenges by revamping its own tax system. He noted that,
“By revamping Nigeria’s tax system, we can better navigate potential challenges and seize any opportunities this development may present.” His comments underscore the need for Nigeria to remain agile in the face of global shifts.
In addition to the external pressures posed by Trump’s policy, Nigeria is in the midst of significant tax reforms under the leadership of President Bola Tinubu. On October 3, 2024, President Tinubu submitted four key tax reform bills to the National Assembly: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
These bills have sparked debate regarding equity, implementation, and the broader economic implications of the proposed reforms.
The Nigerian Governor’s Forum (NGF) has endorsed a revised Value Added Tax (VAT) sharing formula, which seeks to ensure a more equitable distribution of resources among the states.
The formula allocates 50% based on equality, 30% based on derivation, and 20% based on population. Oyedele has expressed support for this formula, which aims to address regional disparities and promote fairness.
During his address at The Platform event hosted by The Covenant Nation on Saturday, Oyedele stressed the importance of compromise in implementing the country’s tax reforms.
“You also need to consider other things, including political considerations. At the end of the day, if you need to move one kilometre, you don’t have to move all of that at once; you can’t even jump one kilometre at once. Maybe sometimes you need to just move gradually,” he said.
