In alignment with his commitment to eliminate all obstacles hindering business expansion in Nigeria, President Bola Tinubu has sanctioned the formation of a Presidential Committee on Fiscal Policy and Tax Revisions.
The panel will be led by Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), Mr. Taiwo Oyedele.
As per a statement by presidential spokesperson, Dele Alake, it will consist of experts from both the private and public sectors and will be responsible for various aspects of tax law amendment, fiscal policy formulation and coordination, tax harmonization, and revenue management.
Special advisor to the president on revenue, Mr. Adelabu Zacch Adedeji, clarified that President Tinubu acknowledges the significance of a robust fiscal policy environment and an efficient taxation system for the functioning of the government and the economy.
”Nigeria ranks very poorly in the global ease of paying taxes while the country’s tax to GDP ratio is one of the lowest in the world and significantly below the African average.
”This has resulted in an excessive reliance on borrowing to finance public expenditure which consequently limits the fiscal capacity as debt service costs consume a larger proportion of government revenue, leading to a perpetual cycle of insufficient funding for socio-economic development.
”While some marginal progress has been achieved over the years, the outcomes have not been groundbreaking enough to alter the narrative,” he said.
Adedeji outlined the main issues in Nigeria’s tax system including multiple taxes and revenue collection agencies, fragmented and intricate tax system, low tax morale, high prevalence of tax evasion, high cost of revenue administration, lack of coordination between fiscal and economic policies, and poor accountability in the utilization of tax revenue.
The establishment of this panel reflects President Tinubu’s dedication to addressing these challenges and implementing transformative revisions in fiscal policy and taxation, the statement said.
The panel’s primary objective is to improve revenue collection efficiency, ensure transparent reporting, and promote the effective utilization of tax and other revenues to enhance citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.
These endeavors will not only enhance Nigeria’s revenue profile but also create a more favorable and globally competitive business environment.
”Our aim is to revamp 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.
”It should be noted that this panel will not only advise the government on necessary revisions but will also spearhead the implementation of such recommendations in support of the comprehensive fiscal policy and tax reform agenda of the current administration,” he added.