President Bola Tinubu has approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms, according to a statement released by his office on Thursday.
The committee, chaired by Taiwo Oyedele, the Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), will consist of experts from the private and public sectors. Its mandate encompasses tax law reform, fiscal policy design and coordination, harmonization of taxes, and revenue administration.
Speaking on behalf of the President, Adelabu Zacch Adedeji, the Special Adviser on Revenue, emphasized the critical role of a robust fiscal policy environment and an efficient taxation system for the functioning of the government and the economy.
Adedeji highlighted Nigeria’s poor ranking in global ease of paying taxes and its low Tax-to-GDP ratio, which is significantly below the African average.
These factors have resulted in heavy reliance on borrowing to finance public spending, thereby limiting fiscal space and hindering socio-economic development.
“While some progress has been made over the years, it has not been sufficient to effect a transformative change in the prevailing situation,” Adedeji noted.
Among the key challenges facing Nigeria’s tax system are the presence of multiple taxes and revenue collection agencies, a fragmented and complex tax structure, low tax morale, widespread tax evasion, high costs associated with revenue administration, lack of coordination between fiscal and economic policies, and inadequate accountability in the utilization of tax revenue.
The establishment of the committee reflects President Tinubu’s commitment to addressing these challenges and bringing about transformative reforms in fiscal policy and taxation.
The committee’s primary objective is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilization of tax and other revenues.
These measures aim to bolster citizens’ tax morale, foster a healthy tax culture, and encourage voluntary compliance.
Consequently, these efforts are expected to improve Nigeria’s revenue profile and create a more favorable and globally competitive business environment.
- “Our aim is to transform the tax system to support sustainable development and achieve a minimum Tax-to-GDP ratio of 18% within the next three years, without stifling investment or economic growth,” said the Special Adviser on Revenue.
Importantly, the committee will not only provide recommendations for necessary reforms but will also be responsible for driving the implementation of such reforms in support of the comprehensive fiscal policy and tax reform agenda of the current administration.
President Tinubu’s initiative underscores his dedication to fostering a conducive environment for businesses to thrive and stimulating economic growth in Nigeria.
Please reduce PIT rates. It is too high.
Individuals pay relatively more than companies in this country.