The Federal Inland Revenue Chief should be tossing and turning now in anguish going by a recent Reuters article. The articles suggest the newly elected government of Nigeria, All Progressive Congress (APC) has no immediate plans for tax reforms. Here is an excerpt of the article for reference;
Oil firms keen to know how Nigeria’s president elect Muhammadu Buhari plans to tax them could be waiting a long time as he makes ending corruption and reforming the opaque national oil company his most urgent sector priorities.
Four party sources from Buhari’s All Progressives Congress (APC) told Reuters the issue of fiscal terms, seen as crucial by the industry, will have to wait on current thinking about oil and gas policies for Africa’s leading producer.
Crude output has stagnated close to 2 million barrels per day over the past few years, owing partly to underinvestment.
“We need to address the structural issues and leave the fiscal for now,” Senator Bukola Saraki, whose APC party controls both houses of parliament after a landslide win, told Reuters.
“A more transparent NNPC (Nigeria National Petroleum Corporation) is needed with reasonable accounting,” he said.
So basically, the APC will spend the crucial initial period of its governance chasing after reforms and corruption and will put revenues targets in the cooler. This is probably an opportunity cost we can’t afford considering the fiscal state of things in the country. Nigeria earns a huge portion of its revenues from oil taxes and is looking to widen its tax base to remain in business and as such paying little attention to this aspect may just be a costly error.
Leaving “fiscal for now” like Bukola Saraki thinks is wrong mindset that needs to be reconsidered asap. Nigeria has as much Fiscal issues as structural and both are mutually inclusive and must go hand in hand.
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