In a social media post, Mr Taiwo Oyedele, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, addressed ten frequently asked questions regarding the committee.
For the question “Should we expect more taxes and frequent changes to the tax laws?” He noted,
“We do not intend to introduce new taxes or impose higher tax rates. Rather, our mandate is to reduce the number of taxes and levies while harmonizing revenue collection to reduce the burden on the people and businesses. The objective is to avoid taxing investment, capital, production or poverty. We plan to review and re-enact the major tax laws in a holistic manner thereby limiting the necessity for frequent change through annual finance acts.”
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On the question of achieving an 18% tax-to-GDP ratio within the next three years, he noted,
“The average tax to GDP ratio for Africa excluding Nigeria is about 18%. This is the basis for the target of 18% and the estimated tax gap of N20 trillion. There is a huge opportunity to generate revenue by leveraging technology and tax intelligence to close the tax gap. In addition, we will rationalize incentives, reduce the cost of collection, and optimize revenue from government assets and natural resources. This way we can generate more revenue without introducing new taxes.”
Oyedele noted that the timeframe for the committee’s assignment was one year, he said,
“The work of the committee is expected to be completed within one year and divided into 3 milestones (1) Quick Wins within 30 days focusing on urgent interventions to cushion the effect of socio-economic challenges (2) Critical Reforms within 6 months including measures to address multiplicity of taxes, simplify the tax laws, ensure policy coordination, drive accountability and transparent reporting (3) Implementation of structural revenue reform measures and critical fiscal policy changes.
On the question about the members of the committee, he noted,
“Members of the committee are drawn from a diverse pool of eminently qualified Nigerians across all geopolitical zones, age brackets, religion and gender. They represent the private sector including trade associations, small businesses, civil society, and professional bodies as well as public sector institutions at federal, state, and local government levels.”
He also clarified that no revenue collection agency would be stopped from performing that function, noting that those agencies were empowered by law. Oyedele noted,
“No agency has been stopped from collecting revenue as many of them are empowered to do so by law. However, many of the agencies would rather focus on their primary functions hence we intend to harmonise the fragmented revenue collection functions into one agency for each government. This is to improve efficiency and enable the agencies to focus on their primary mandates for the overall benefit of the economy.”
Also Read: Tinubu Gives Oyedele’s Tax Reforms Committee 18% Tax to GDP Ratio Target
The establishment of the Presidential Fiscal Policy and Tax Reforms Committee marked a pivotal early initiative undertaken during the Tinubu administration, addressing the pressing fiscal challenges faced by Nigeria. In light of the intricate intricacies inherent to taxation, both in enhancing government revenue and fostering an attractive environment for investors, the committee faces a formidable task ahead. Its role is not just critical; it’s a balancing act of immense significance.
