THE Federal Government has said its newly constituted presidential committee on Fiscal Policy and Tax reforms will focus on repealing laws that inhibit ease of doing business in the country while also promoting trade facilitation and wealth creation.
The Head of the tax reforms committee, Taiwo Oyedele, said on Tuesday, August 9 2023, that the federal and state government will focus on a framework that harmonises taxes and reduces the number of irregular taxes levied on Nigerians.
Oyedele, a tax consultant expert, while giving further insight into the programme inaugurated by President Bola Ahmed Tinubu, said the government won’t tax poverty but would focus on creating wealth.
“The work of the committee, like the President said, is divided into three broad areas of fiscal governance, revenue transformation and growth facilitation. We’ll also focus on the harmonisation of both monetary and fiscal policies. It also focuses on connecting the federal government with the sub-nationals and improving governance impact at local government levels.
“On the revenue transformation aspect of the mandate focuses on how to raise revenue without increasing the burden on the poor. As of today, we have a significant tax gap in the region of N20 trillion,” Oyedele said.
The committee, Oyedele said, planned to repeal many of the tax laws that currently make doing business difficult in the country while prioritising tax harmonisation.
“The other way we think we can raise revenue is to lessen our cost of revenue collection, which is about the highest globally. The reason is that you have all manners of agencies numbering up to 63 Ministries, Department and Agencies of the government MDAs, in the tax collection pool,” Oyedele said in a monitored broadcast on Channels Television.
He regretted the huge number of government agencies in the tax collection pool, which are primarily not mandated to do so by law.
This development, he said, distracts them from their core mandate, which is to facilitate business for the economy.
He noted, henceforth, that such revenue collection functions would be handled by the Federal Inland Revenue Service (FIRS) for efficiency.
“If you’re Nigeria Customs Service, focus on trade facilitation and border protection, while if you’re Nigeria Communications Commission NCC, just focus on your regulation mandate. This will help improve transparency and hold everyone to account.”
He also said the committee would look at all manner of incentives issued to some businesses and do a cost-benefit analysis to ascertain their economic impact.
“We would have to revisit the incentives and look at their profitability to the Nigerian state. Some may have made sense when they were issued, but not currently.
The committee, he said, will focus on growth facilitation, which seeks to support small businesses while ensuring key laws that support cross-border businesses are enacted.
“We want to ensure we don’t lose businesses to other African neighbours, rather would ensure laws protect such businesses and create opportunities for our people. If you observe, most of those businesses are technology and ICT sector.
Recall president Bola Ahmed Tinubu, Tuesday, inaugurated the committee on Fiscal Policy and Tax Reforms with a mandate to achieve an 18 per cent Tax-to-GDP (tax to gross domestic product) ratio within three years.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.