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Trump’s External Revenue Policy May Disrupt Global Trade — Oyedele

January 21, 2025

 

The Chairman of Nigeria’s Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has raised concerns about the potential global trade disruptions caused by U.S. President Donald Trump’s newly announced External Revenue Service. Oyedele shared his insights via his X (formerly Twitter) handle late Monday, shortly after Trump’s inauguration as the 47th President of the United States.

During his inauguration, Trump declared the establishment of the External Revenue 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.”

In his reaction, Oyedele remarked, “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.”

He also noted that Nigeria must revamp its tax system to mitigate potential risks and capitalize on opportunities arising from the development.

Oyedele’s comments come as Nigeria continues to implement sweeping tax reforms. On October 3, 2024, President Bola Tinubu submitted four 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.

The proposed reforms aim to enhance revenue generation, streamline tax administration, and promote equitable resource allocation among states. However, the bills have sparked debates over their equity and economic impact.

The Nigerian Governors Forum (NGF) has endorsed a revised Value Added Tax (VAT) sharing formula, proposing a distribution of 50% based on equality, 30% on derivation, and 20% on population. Oyedele supports the NGF’s formula, emphasizing the importance of compromise in implementing reforms.

At The Platform, a policy event hosted by The Covenant Nation on Saturday, Oyedele stated, “Reforms require balancing fiscal needs with political considerations. Sometimes, gradual steps are necessary to achieve long-term goals.”

Trump’s External Revenue Service could impose significant tariffs on imports, leading to increased costs for global trade partners. Experts fear this could trigger retaliatory measures, disrupt global supply chains, and strain trade relationships.

Oyedele urged Nigeria to adopt proactive measures to safeguard its economic interests in the evolving global tax landscape.

As the world awaits the full implementation of Trump’s policy, nations are bracing for potential trade shifts and the need to navigate an increasingly protectionist global economy.

Written by Adeyemi Adewale




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