Africa’s large informal sector shouldn’t be over taxed – Oyedele

Taiwo Oyedele, the chairman, Presidential Committee on Fiscal Policy and Tax Reform has said the increasing volume of informal sector in Africa should be utilized to drive economic growth rather than being overburdened by tax.

The tax expert made this call in a statement on his official X account on Tuesday.

He noted that no country can become rich by taxing poverty, adding that the small businesses are one of the quickest ways of creating shared prosperity.

“Africa’s large informal sector shouldn’t be targeted for tax extraction. Instead, it should be seen as a massive opportunity to drive growth and create wealth,” Oyedele said.

“Think of these businesses NOT as fruits to be harvested in the immediate term, but as seeds to be nurtured for inclusive development in the medium to long term,” the former fiscal policy adviser and Africa tax leader at PwC said.

Recall that Oyedele had said it was working on reviewing Nigeria’s value added tax (VAT) rate to protect the vulnerable as well as small businesses.

The tax expert had noted that with the current tax system, basic consumptions which should be exempted from tax were liable, adding that many small businesses have to contend with VAT payment.

In Nigeria, the informal sector accounts for over 80 percent of job employment and contributes more than 50 percent to the country’s gross domestic product (GDP), according to the World Bank and International Monetary Fund.