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
to include multiple taxes and revenue collection agencies, fragmented and
complex tax system, low tax morale and high prevalence of tax evasion.
He said others are high cost of revenue administration, lack
of coordination between fiscal and economic policies, and poor accountability
in the utilisation 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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