Oyedele: Fiscal federalism requires accountability at all government levels

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that the country’s push toward fiscal federalism will remain ineffective unless all tiers of government embrace accountability, fairness, and shared responsibility in tax administration.

He made the remarks in Abuja on Tuesday during the opening of a national workshop focused on strengthening tax compliance under Nigeria’s evolving tax regime and improving collaboration between federal and sub-national governments.

Oyedele stressed that fiscal reforms alone would not deliver results unless states, local governments, and federal institutions commit to transparent tax practices and proper revenue management, adding that taxes remain central to funding infrastructure, healthcare, education, and national security.

Also speaking at the workshop, the Executive Chairman of the Nigeria Revenue Service (NRS), Nigeria Revenue Service, Dr. Zacch Adedeji, said Nigeria must address long-standing structural imbalances in its tax system, where some government entities benefit from federal allocations without making corresponding tax contributions.

He said the country could no longer sustain a system where compliance is uneven across states and government-owned enterprises, warning that such gaps weaken trust and distort fiscal fairness.

Adedeji added that Nigeria is targeting about ₦40 trillion in tax revenue this year, describing it as critical to the country’s fiscal stability and economic sustainability.

He explained that the service is shifting away from an enforcement-heavy approach toward a voluntary compliance system supported by improved cooperation, data sharing, and technology-driven processes.

According to him, better coordination between all tiers of government is essential to ensuring that withheld taxes are properly remitted and leakages are reduced across the system.

A senior director at the NRS, Amina Ado, also highlighted compliance gaps, noting that some government institutions were failing to remit Value Added Tax (VAT) and Withholding Tax (WHT), which has worsened fiscal imbalances among states.

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She said the agency is working on strengthening monitoring systems and introducing more transparent, technology-based processes to improve compliance and reduce friction between tax authorities and institutional taxpayers.

The officials collectively argued that fiscal federalism can only function effectively when every level of government contributes fairly to the national revenue pool while also benefiting transparently from it.

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