Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has clarified that inheritance tax will not be part of the new tax bills currently before parliament.
Speaking during a public hearing in Abuja, organized by the House of Representatives Committee on Finance, Oyedele addressed concerns that the government was planning to bring back inheritance tax.
He explained that confusion arose from Section 4, Subsection 3 of the Nigerian tax bill, which only deals with family income, not inheritance.
“If an individual owns a property and rents it out, they pay tax on the rent. Similarly, if a family owns a house and rents it out, they should also pay tax. If we exempt families from taxation, then all properties in Nigeria will simply be declared family-owned, and no one will pay tax,” he said.
Oyedele noted that there is a clear difference between inheritance and income. He explained that inheritance includes assets, wealth, and cash, while income is money earned from business or employment.
“This provision is not new. It has been in our tax laws since independence. As we speak today, it exists in the Personal Income Tax Act, Section 2, Subsection 5,” he added.
He further pointed out that inheritance tax was introduced by the military government in 1979 but was later repealed in 1996. He assured that there is no plan to bring it back in any form.
At the hearing, the Chairman of the Federal Inland Revenue Service (FIRS), Zach Adedeji, also addressed concerns about investors in free zones who try to move their products into Custom areas without paying the required taxes.
“No responsible government will allow investors to produce in free zones and then dump their products into Custom areas to avoid taxation,” Adedeji stated.
He noted that the government will not tolerate tax avoidance practices that create economic imbalances.
Oyedele also dismissed claims that 70% of investors in free zones had withdrawn funds due to unfavorable tax policies.
“Cash in circulation in Nigeria is about ₦4 trillion, while the total money supply exceeds ₦100 trillion. Last year alone, the value of digital transactions was ₦1.08 quadrillion. Nobody is withdrawing money to run from Nigeria,” he said.
He further explained that no existing law permits free zone companies to sell products into the Custom territory while competing with tax-paying businesses. He warned that allowing this would disrupt the economy.
