President Bola Tinubu approved the formation of a Presidential Committee on Fiscal Policy and Tax Reforms on Friday.
Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers, was named committee chairman.
The news comes just 24 hours after the President signed four Executive Orders delaying the 5 percent excise tax on telecommunications services and the rise of excise charges on locally built vehicles.
According to a statement signed by Tinubu’s Special Adviser on Special Duties, Communication, and Strategy, Dele Alake, the committee “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, tax harmonisation, and revenue administration.”
According to the statement headlined ‘President Tinubu establishes tax reform committee,’ the body’s principal goal is to improve revenue collection efficiency and ensure transparent reporting.
It will also encourage the efficient use of tax and other revenues in order to raise residents’ tax morale, build a healthy tax culture, and encourage voluntary compliance.
Alake referenced prior remarks by Tinubu’s Special Adviser on Revenue, Zaccheus Adedeji, who explained the need for a sound fiscal policy environment and an effective taxation system for the operation of the government and the economy.
According to Adedeji, “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, which include multiple taxes and revenue collection agencies, a fragmented and complex tax system, low tax morale, a high prevalence of tax evasion, a high cost of revenue administration, a lack of coordination between fiscal and economic policies, and poor accountability in tax revenue utilization.
Adedeji stated that the administration’s goal is to restructure the tax system to support sustainable development and attain a minimum tax-to-GDP ratio of 18 percent within three years without strangling 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.
Oyedele, who chairs the committee, is the Thematic Lead for the Fiscal Policy & Planning Commission and Chairman of the West Africa Debt Management Roundtable of the Nigerian Economic Summit Group.
He also heads the Taxation & Fiscal Policy Faculty Board of the Institute of Chartered Accountants of Nigeria and is a member of the Nigerian Taxation Standards Board.
Oyedele serves as a member of the Ministerial Committee on implementing Nigeria’s National Tax Policy. He is a member of the Global Tax Forum and has previously served as a member of the Global Governing Council of the Association of Chartered Certified Accountants.
Oyedele, an Associate Professor at the Babcock University Business School, is an alumnus of the London School of Economics & Political Science, Yale University, and Harvard Kennedy School Executive Education.
He is also a guest lecturer at the Lagos Business School and the Founder and President of Impact Africa Foundation.
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