Oliver Howard
Wed, Aug 9, 2023 7:15 AM

Nigeria Sets Sight on Fiscal Policy and Tax Reforms to Boost Revenue

BusinessEarn Max 30 Coins💰 Get coins immediately after reading this article

Nigeria Sets Sight on Fiscal Policy and Tax Reforms to Boost Revenue
Nigeria's President Bola Tinubu inaugurated the Presidential Committee on Fiscal Policy and Tax Reforms to address the country's over-reliance on borrowing and improve revenue generation. The committee's one-year mandate focuses on fiscal governance, tax reforms, and growth facilitation. With a target of achieving an 18% tax-to-GDP ratio within three years, the committee aims to close the estimated N20 trillion tax gap, ensuring financial buoyancy without resorting to excessive borrowing.

Abuja – In a bid to tackle the persistent challenge of over-reliance on borrowing for public expenditure, Nigeria's President Bola Tinubu inaugurated the Presidential Committee on Fiscal Policy and Tax Reforms. Emphasizing the burden of debt servicing, he stressed the need to improve the country's revenue profile and business environment.

Chairing the committee, Mr. Taiwo Oyedele, along with members drawn from the public and private sectors, is mandated to accomplish three main objectives: fiscal governance, tax reforms, and growth facilitation. The committee's immediate task is to identify quick reforms that can be implemented within 30 days, followed by critical reform measures within six months, with full implementation taking place within one calendar year.

President Tinubu acknowledged Nigeria's current international standing in the tax sector, highlighting areas of concern such as the ease of tax payment and the tax-to-GDP ratio, which is lower than the continental average of Africa. With the aim of achieving a minimum tax-to-GDP ratio of 18% within the next three years, Nigeria plans to transform its tax system to support sustainable development.

The committee's pivotal role in revenue transformation was reinforced by the Special Adviser to the President on Revenue, Mr. Zacchaeus Adedeji, who commended President Tinubu's track record in this area. Adedeji commended the committee members' accomplishments and expertise, drawing inspiration from President Tinubu's notable revenue transformation achievements during his tenure as the governor of Lagos State over two decades ago.

Closing the existing tax remittance gap estimated at N20 trillion annually is a key objective put forth by the Federal Government through the committee. Mr. Oyedele highlighted the significance of closing this gap, stating that it would enable the country to financially support projects without resorting to excessive borrowing.

According to Oyedele, "There is a huge tax gap. As of today, without introducing any new taxes, if we can ensure that everyone who is supposed to pay their taxes does so, we will not be where we are. The tax gap is estimated to be around N20 trillion, and our goal is to close this gap to generate more revenue for the country."

The inefficiency in tax collection and outdated tax laws pose additional challenges. Oyedele emphasized the need for comprehensive updates to achieve harmonization, address the multiplicity of taxes, and alleviate the burden on the poor and vulnerable while also considering the concerns of investors.

One of the key highlights presented by the World Bank's Country Director for Nigeria, Shubham Chaudhuri, was the removal of subsidy payments, contributing to a two percent increase in the nation's revenue to Gross Domestic Product (GDP). Chaudhuri emphasized the need for Nigeria to increase its tax-to-GDP ratio, citing examples from other middle-income countries.

With Nigeria's commitment to fiscal policy and tax reforms, the country aims to enhance revenue generation, reduce debt servicing demands, and create a more conducive environment for economic growth and development.

Source of content: OOO News 2023-08-09 News

More detailed, more comprehensive, fresher news, please visit OOO NEWS.

Share content to earn coins