JUST In: President Tinubu Approves New Presidential Committee On Fiscal Policy, Tax Reforms…see details
President Bola Tinubu has presently approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms.
This is contained in a statement issued by the Special Adviser to the President on Revenue, Mr. Adelabu Zacch Adedeji, on Friday, which is to fulfill his promise in crippling all barriers impeding business growth in Nigeria.
The committee was revealed to be chaired by Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), Mr. Taiwo Oyedele and comprises of experts from both the private and public sectors and have responsibility for the various aspects of tax law reform, fiscal policy design and coordination, harmonization of taxes, and revenue administration.
Adedeji however, explained that President Tinubu in recognition of the importance of a sound fiscal policy environment and an effective taxation system for the functioning of the government and the economy.
Hear him, ”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 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.”
To this end, Adedeji in a statement pointed out the key challenges in Nigeria’s tax system including multiple taxes and revenue collection agencies, fragmented and complex 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, while remarking that the establishment of this committee reflects President Tinubu’s commitment in addressing these challenges as well as bringing about transformative reforms in fiscal policy and taxation.
”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.
”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.
He concluded that, the committee’s primary objective is also 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.