President Bola Tinubu has approved the establishment of a presidential committee on fiscal policy and tax reforms.
Taiwo Oyedele, fiscal policy partner and Africa tax leader at PriceWaterhouseCoopers (PwC), has been named as the chairman of the committee.
Dele Alake, special adviser to the president on special duties, communications and strategy, announced the development in a statement on Friday.
Alake said the committee will comprise experts from both the private and public sectors and be responsible for various aspects of tax law reform, fiscal policy design and coordination, harmonisation of taxes, and revenue administration.
He said the committee’s primary objective is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilization of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.
Speaking on the committee’s establishment, Zacchaeus Adedeji, special adviser to the president on revenue, said Tinubu recognises the importance of a sound fiscal policy environment and an effective taxation system for the functioning of the government and the economy.
”Nigeria ranks very low on the global ease of paying taxes while the country’s Tax to GDP ratio is one of the lowest in the world and well below the African average,” he said.
This has led to an overreliance on borrowing to finance public spending which in turn limits the fiscal space as debt service costs consume a greater portion of government revenue, annually resulting in a vicious cycle of inadequate funding for socio-economic development.
”While some incremental progress has been recorded over the years, the outcomes have not been transformative enough to change the narrative.”
Adedeji outlined the key challenges in Nigeria’s tax system including multiple taxes and revenue collection agencies, a fragmented and complex tax system, low tax morale, and a high prevalence of tax evasion.
He said others are the high cost of revenue administration, lack of coordination between fiscal and economic policies, and poor accountability in the utilization of tax revenue.
”Our aim is to transform the tax system to support sustainable development and achieve a minimum of 18% Tax to GDP ratio within the next 3 years without stifling investment or economic growth,” the special adviser said.
”It should be noted that this committee will not only advise the government on necessary reforms but will also drive the implementation of such recommendations in support of the comprehensive fiscal policy and tax reform agenda of the current administration.”
The development comes a day after Tinubu signed four executive orders, including the suspension of the 5% excise tax on telecommunication services, as well as the excise duties escalation on locally manufactured products.
The federal government also suspended the import adjustment tax (IAT) imposed on certain vehicles and the green tax on single-use plastics (SUPs).
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Source: thecable.ng
