President Bola Tinubu has approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms as part of efforts to improve the ease of doing business in Nigeria.
On Thursday, the President had signed 4 Executive Orders to also address the challenges identified in the tax policies of the previous administration.
A statement by the Special Adviser to the President on Special Duties, Communications, and Strategy, Dele Alake on Friday, said the committee will be chaired by Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), Taiwo Oyedele.
The committee will comprise experts from the private and public sectors and has responsibility for the various aspects of tax law reforms, fiscal policy design and co-ordination, harmonisation of taxes, and revenue administration.
The statement explained that President Tinubu recognised 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,” the statement read.
It 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 co-ordination between fiscal and economic policies, and poor accountability in the utilization of tax revenue.
According to the statement, the establishment of the committee reflected 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.
It said the efforts will not only improve Nigeria’s revenue profile but also create a more conducive and internationally competitive business environment.
‘The Statement added that the ‘aim was 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.”
