FG Sets Up Committee on Tax Reforms, Aims to Remove Barriers Impeding Business Growth

Deji Elumoye in Abuja

President Bola Tinubu yesterday approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms in line with his promise to remove all barriers impeding business growth in Nigeria.
According to a statement issued by the Special Adviser to the President on Special Duties, Communications and Strategy, Dele Alake, the committee, which will be chaired by Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), Mr. Taiwo Oyedele, will be made up of experts from both the private and public sectors and have responsibility for the various aspects of tax law reform, fiscal policy design and coordination, harmonisation of taxes, and revenue administration.

The release quoted the Special Adviser to the President on Revenue, Mr. Adelabu Zacch Adedeji, as explaining that President Tinubu recognises the importance of a sound fiscal policy environment and an effective taxation system for the functioning of the government and the economy.
According to him: ”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.”
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 utilisation 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, he said.
The committee’s primary objective is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilisation 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 three 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,” Adedeji added.

Pledges to Remove Bottlenecks Hindering Investments

President Tinubu has assured the manufacturing and service sectors that more reforms will be unfolded to enable efficiency and attract investments, saying the ongoing economic ‘‘revolution’’ will be deliberately steered to capture and favour teeming youths in the country.
Speaking yesterday while playing host to a delegation from MTN led by Group Chairman, Mcebisi Jonas, at the State House, Abuja, the President stressed, “We have a responsibility to revolutionise the economy so that our youths can share in the prosperity of the nation, otherwise we are only waiting for the dreams to be charted.

“If you have any problems or impediments do let us know. We are ready to remove bottlenecks to investments in the economy,’’ the President noted while acknowledging the sweeping changes across the world, largely driven by technology.”
President Tinubu said the growing rural-urban migration can only be controlled with more investments in digital technology that will directly improve healthcare systems and education for the poor.  
“I am happy you are moving from Corporate Social Responsibility to be more incisive and inquisitive with technology so that we can see how we can partner structurally.

 “You can do a lot for the economy by partnering with us. We believe no one can succeed alone. The structural adjustments we are making are to ensure we face the right direction and arrive at a destination that caters for our people.
“You and I will make sure that the people have a share of that prosperity. We will, together, build a well-informed society. We have to re-assess the journey. I am glad that the stock market is responding positively to the structural adjustments,’’ he added.

Earlier in his address, MTN Group Chairman said the company had a plan of investing $3.5 billion in the economy over the next five years, with a broader vision of becoming a pan-African company by moving investments from the Middle East and focusing more on Africa, especially Nigeria, where it gets the highest return on investment.

Jonas congratulated the President for the upswing of interest in the country within a short period since he assumed office, May 29, 2023, promising to support in mobilisation of other investors with about $1.5 trillion to look towards Nigeria, where reforms had been styled to favour business and encourage inclusive development.

“The message you have given us is that Nigeria is investible, and with your election, we are seeing decisive, prompt and keen interest in structural reforms,’’ the MTN Group Chairman noted.
The Group President/CEO of MTN, Ralph Mupita, Chairman of MTN Nigeria, Ernest Ndukwe and Chief Executive Officer, Olutokun Karl Toriola were part of the meeting.