Lagos, Aug. 10, 2023: Prof. Akpan Ekpo, Lagos Chairman, Foundation for Economic Research and Training, has advised the Federal Government to reduce the cost of governance to boost Nigeria’s revenue profile.
The economist gave the advice on Wednesday in Lagos, while reacting to the newly inaugurated presidential committee on fiscal policy and tax reforms, called for a drastic reduction in the cost of governance.
“A drastic reduction in the cost of governance is more crucial than addressing the revenue component now,” Ekpo said.
This reduction, he said, would free up resources that could be used for other purposes, such as investing in infrastructure, education, and healthcare.
He said these investments could lead to economic growth, which in turn would generate more revenue for the government.
Expressing further concern about the committee, Ekpo said, “the executive branch of government deals with fiscal policy which includes taxation matters.
“The tax reform policy could be defended in terms of streamlining the tax trajectory and bringing more persons who are eligible into the tax net.
“The mandate of the committee is such that it makes a mockery of the executive branch, especially the relevant economic ministries.
“There is an adviser on monetary policy which is the job of the Central Bank and now a committee on fiscal policy and tax reforms with conflicting mandate.
“It should be stated that fiscal policy also includes expenditures.”
The economist said that the tax/GDP ratio benchmark was not cast in stone and since it was not permanent, it could be changed.
Besides, Ekpo expressed disbelief that a 400 level student could be a member of the committee.
“A 400 level student member of the committee beats my imagination. I do not know her background and competence.
“Let politics not dominate the management of the economy. Beware of sending wrong and confusing signals to potential investors,” he said.
The committee’s target is to improve Nigeria’s revenue profile while making the business environment more conducive and internationally competitive.
Its aim is to transform the tax system to support sustainable development, while, it’s also expected achieve a minimum of 18 per cent tax to Gross Domestic Product ratio within the next three years.
