By Yahaya Umar 

President Bola Tinubu has approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms.

The move is in consonance with his promise to remove all barriers impeding business growth in Nigeria

In a statement on Friday, Dele Alake, Special Adviser to the President on Special Duties, Communications and Strategy, disclosed that the committee will be chaired by Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), Taiwo Oyedele.

It will comprise 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.

Special Adviser to the President on Revenue, Mr. Adelabu Zacch Adedeji, explained that President Tinubu recognizes the importance of a sound fiscal policy environment and an effective taxation system for the functioning of the government and the economy.

”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,” he said.

Adedeji outlined the key challenges in Nigeria’s tax system to include 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.

The establishment of this 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 to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.

These efforts will not only improve Nigeria’s revenue profile but also create a more conducive and internationally-competitive business environment.

”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,” the SA on Revenue added

Accordingly, the committee comprises experts from both the private and public sectors and will be responsible for various aspects of tax law reforms, fiscal policy design and coordination, harmonization of taxes, and revenue administration.

The Special Adviser to the President on Revenue, Adelabu Zacch Adedeji, explained that President Tinubu recognizes the importance of a sound fiscal policy environment and an effective taxation system for the government’s and the economy’s functioning.

“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.

Adedeji outlined that the committee would address 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.

“We aim to transform the tax system to support sustainable development and achieve a minimum of 18% Tax to GDP ratio within the next three years without stifling investment or economic growth”, he added.

Recall that on Thursday, Tinubu suspended the implementation of the 2023 Finance Act, telecoms, import and other taxes to create an enabling business environment.

In the same vein,  President Bola Tinubu has signed four Executive Orders one of which is the suspension of the five per cent Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.

The Special Adviser to the President on Special Duties, Communications and Strategy, Dele Alake announced this on Thursday while briefing journalists at the State House in Abuja.

He stated that the President also signed the Finance Act (Effective Date Variation) Order, 2023, which now defers the commencement date of the changes contained in the Act from May 23, 2023 to September 1, 2023.

According to the presidential spokesman, this is to ensure adherence to the 90 days’ minimum advance notice for tax changes as contained in the 2017 National Tax Policy.

President Tinubu also signed The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifting the commencement date of the tax changes from March 27, 2023 to August 1, 2023 and also in line with the National Tax Policy.

Tinubu also ordered the suspension of the newly introduced Green Tax by way of Excise Tax on Single-Use Plastics, including plastic containers and bottles as well as the suspension of Import Tax Adjustment levy on certain vehicles.

Alake equally explained that the President issued these orders to ameliorate the negative impacts of the tax adjustments on businesses and chokehold on households across affected sectors.

He however reiterated the President’s commitment to reviewing complaints about multiple taxation, local and anti-business inhibitions.

He also noted that President Tinubu’s administration will, therefore, continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.

The President assured Nigerians that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.