Trump’s external revenue service could disrupt global trade – Oyedele

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has raised concerns about the potential impact of a bold new initiative announced by U.S. President Donald Trump. Trump’s recent inauguration marked the official launch of his controversial plan to establish an “External Revenue Service” aimed at imposing tariffs and taxes on other nations.

Oyedele, in a statement shared on his social media platform on Monday night, warned that this move could disrupt global trade and further complicate the already intricate international tax system.

During his inaugural speech, President Trump outlined his vision for the new service: “Instead of taxing our citizens to enrich other countries, we tariff and tax other countries to enrich our citizens. We are establishing the External Revenue Service to collect all tariffs, duties, and revenue. This will bring a massive amount of money pouring into our treasury from beyond our borders.”

In reaction to Trump’s announcement, Oyedele highlighted the far-reaching consequences of such a strategy. He pointed out that the establishment of the External Revenue Service could severely disrupt global trade dynamics, potentially leading to a ripple effect of economic uncertainty worldwide.

“This move could exacerbate the complexity of international trade regulations and complicate the already challenging global tax environment,” Oyedele noted, emphasizing the importance of Nigeria’s ongoing tax reforms in light of these developments.

Oyedele also pointed out that Nigeria, through its own tax reforms, could be better positioned to navigate these global challenges and even capitalize on potential opportunities arising from shifts in international fiscal policies.

He has been at the forefront of Nigeria’s tax reform efforts, which have garnered significant attention both domestically and internationally.

Earlier in October 2024, President Bola Tinubu forwarded 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.

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These bills have sparked significant debate regarding their equity, implementation, and economic implications, reflecting the delicate balance between national fiscal needs and regional concerns.

The Nigerian Governors’ Forum (NGF) recently endorsed a revised Value Added Tax (VAT) sharing formula, aimed at promoting fairer resource distribution across the states. Under this formula, 50% of VAT revenue would be allocated based on equality, 30% on derivation, and 20% on population, a move that has garnered both praise and criticism.

In a recent speech at ‘The Platform’, an event hosted by The Covenant Nation, Oyedele expressed his support for the NGF’s formula and underscored the importance of compromise in the implementation of tax reforms.

“At the end of the day, reforms require political sensitivity. If the goal is to move forward, sometimes you don’t have to take giant steps—you can make gradual progress, as long as you keep moving in the right direction,” Oyedele said.

As the global tax landscape evolves, Oyedele’s leadership in Nigeria’s fiscal policy reform efforts will be crucial in ensuring the country is prepared for the challenges and opportunities that lie ahead.