PRESIDENT Bola Tinubu has inaugurated the presidential 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.
The inauguration took place on Tuesday, August 8, in Abuja.
Tinubu had, on Thursday, July 6, signed four Executive Orders on tax relief and, the following day, set up a presidential tax committee chaired by Taiwo Oyedele.
The move was to amend Nigeria’s tax laws and fiscal policy to improve government revenue.
Nigeria’s tax administration faced many issues arising from multiple taxation, poor administration, tax touting, non-payment of tax refunds, and other complex natures of the tax laws.
But a financial expert, David Adonri, had told The ICIR that the reforms proposed by the government should adequately address the welfare of the average Nigerian to engender trust.
Adonri explained that tax as a core fiscal policy does not constitute the only primary source of government revenue but also as income redistribution to incentivise investment in critical sectors of the economy.
In his address at the inaugural meeting of the tax reforms committee, the President said the members comprise experts from both the private and public sectors.
According to him, the aim is to transform the tax system to support sustainable development while, at the same time, achieving a minimum of 18 per cent tax-to-GDP ratio within the next three years.
“The Committee is expected to achieve its mandate within a period of one year. They are, in the first instance, expected to deliver a schedule of quick reforms which can be implemented within thirty days.
“Critical reform measures should be recommended within six months and full implementation will take place within one calendar year,” Tinubu said.
The committee is mandated to address three broad fiscal challenges facing the economy: fiscal governance, tax reforms, and growth facilitation.
Their report will also cover tax reform, fiscal policy design and coordination, and harmonisation of taxes and revenue administrations.
The president said, “Within the scope of this mandate, the Committee shall have as its objective the advancement of viable and cost-effective solutions to issues such as the multiplicity of revenue collection agencies, the high cost of revenue administration, the excessive burden of compliance on ordinary taxpayers, the lack of effective coordination between fiscal and other economic policies within and across levels of government and poor accountability in the utilisation of tax revenues.”
Tinubu has, in his less than three months in office, introduced other drastic reforms, including fuel subsidy removal and foreign exchange unification.
The president stated clearly that the committee should be empowered not merely to make recommendations but also to provide practical support for the government in the execution and delivery of the recommended changes.
“We should no longer tax investment or production; but focus on returns, income and consumption. This government will tax fruits, not seeds,” Tinubu added.
Note: The headline Was updated to reflect 3 years instead of one.
