Abuja, July 7, 2023: President Bola Ahmed Tinubu has approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms in line with his promise to remove barriers to business growth.
Mr Dele Alake, Presidential Adviser on Special Duties, Communications and Strategy, disclosed this on Friday in Abuja that the committee would be chaired by Mr Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC).
The committee comprise of experts from private and public sectors and has responsibility for tax law reform, fiscal policy design and coordination, harmonization of taxes, and revenue administration.
Special Adviser to the President on Revenue, Mr Adelabu Adedeji, explained that Tinubu recognises the importance of a sound fiscal policy environment and an effective taxation system for 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.
”This has led to an over reliance on borrowing to finance public spending which in turn limits the fiscal space as debt service costs consume a greater portion of government revenue.
“This has resulted to 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,” he said.
Adedeji outlined the key challenges in Nigeria’s tax system to include multiple taxes and revenue collection agencies, fragmented and complex tax system and low tax morale.
He said that others include high prevalence of tax evasion, high cost of revenue administration, lack of coordination between fiscal and economic policies, and poor accountability in the utilisation of tax revenue.
He said that the establishment of the committee reflects Tinubu’s commitment to addressing those challenges and bring about transformative reforms in fiscal policy and taxation.
The committee’s primary objective is to enhance revenue collection, ensure transparent reporting, and promote the effective utilisation of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.
These efforts are expected to not only improve Nigeria’s revenue profile but also create a more conducive and internationally-competitive business environment.
”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 three years without stifling investment or economic growth.
”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,” Adedeji added.
The committee chairman, Oyedele chairs the Taxation and Fiscal Policy Faculty Board of the Institute of Chartered Accountants of Nigeria (ICAN) and is a member of the Nigerian Taxation Standards Board.
He also serves as a member of the Ministerial Committee on the implementation of Nigeria’s National Tax Policy.