Takeaways from ‘Quick Wins’ to Revitalize Nation’s Economy

Temitope Ajayi writes about the onerous task before the Presidential Committee on Fiscal Policy and Tax Reforms headed by Taiwo Oyedele which last week submitted its initial report to President Bola Tinubu at the State House, Abuja.

The Presidential Committee on Fiscal Policy and Tax Reforms led by Taiwo Oyedele last Tuesday had audience with President Bola Tinubu at the State House, Abuja.

The import of the visit was a presentation to the President on current status of the committee’s assignment since its inauguration on August 8, 2023.

The committee tagged its presentation ‘Quick Wins’ and sought the President’s nod on immediate implementation of some of its key recommendations.

After listening attentively to the presentation, President Tinubu noted that charting a critical and enduring path to the country’s economic recovery had become more compelling, stressing that his administration is strongly committed to removing all the inhibitions that slow down growth and development. The President directed his Special Adviser on Policy Coordination, Hadiza Bala-Usman, who was also present at the presentation, to coordinate with relevant ministries and agencies of government for immediate implementation of the ‘Quick Wins.’

In his remarks, FIRS Chief Executive,  Zack Adedeji underscored the importance of progressive fiscal policy and business-friendly tax system, promising that his agency would explore all available opportunities to significantly improve and diversify the nation’s revenue profile away from oil revenue which has remained the mainstay of the economy in the last 50 years. Tax reforms, Adedeji pointed out, are an integral part of a robust fiscal policy.

“Nigeria’s fiscal policy serves as the foundation of economic stability. It dictates how the government collects, manages and allocates resources for the betterment of our people. A well-developed fiscal policy is crucial for the provision of infrastructure, healthcare, education and social services to our growing population,” FIRS boss reiterated.

Harping on how to accelerate growth and retool the economy, Chairman of the Presidential Committee, Oyedele explained that the most sustainable way for any country to generate revenue is to grow the economy.

According to him, when businesses thrive and succeed in a country, and individuals prosper, they pay taxes to government which will be used to fund social and development needs of the people.

“We are looking at how we can remove the impediments to businesses and to trade. When we remove these impediments, people can then gain employment.  We have over 60 taxes and levies, officially collectible by Federal, state and local governments. Unofficially, the taxes are over 200, making life difficult for our people. The taxes at all levels of government combined, we think, should be less than 10,” he declared.

While the Fiscal Policy and Tax Reforms Committee has designed implementation instruments for the activation of their recommendations, below are key takeaways from the Quick Wins:

Presidential Executive Orders that will address:

Duplication of functions in the public service and ensure prudent public financial management.

Imposition of excise tax on foreign exchange transactions outside the official market

Impediments to export promotion and bottlenecks regarding Exports Expansion Grants to be addressed.

Emergency Economic Intervention Bill on:

Increase in personal income tax exempt threshold and personal relief allowance

Tax break for private sector in respect of wage increases to low-income earners, transport subsidy and net increase in employment

Amendments to redirect certain revenues accruing to some MDAs and windfall revenue from levies tied to fuel products to fund suspended multiple taxes.

Removal of impediments to global employment opportunities.

Outlaw sales of forex outside the official market

Changes to promote export in services and intangibles.

Remove restriction on repatriation of export proceed to purchase raw materials

Ministerial Directive and Order on:

Suspension of VAT on diesel and tax waivers on CNG, CNG conversion and renewable energy items.

Comprehensive review of tariffs on the 43 items and import policy on other items prohibited for imports.

Reforms of withholding tax regulations to ensure simplicity and ease pressure on working capital for businesses.

Memorandum of Understanding with states on:

Spending framework for subsidy removal and forex reform windfall including national portal to track utilization.

Suspension of multiple taxes which places burden on the poor and small businesses.

FIRS Circulars to:

Modify Tax ProMax to allow taxpayers make part payments of outstanding tax liabilities.

Grant waiver on penalty and interests on the condition of full payment on or before December 31, 2023.

Since he assumed office, President Tinubu’s focus has been on repositioning the economy for optimum performance so that the business environment can be made more conducive for local and foreign investments, catalyse growth and improve the living conditions of Nigerians.

Analysts and economic actors have praised the ‘Quick-Wins’ as capable of positively redirecting the economy towards full recovery. 

In his reaction to the ‘Quick-Wins’ Head of Operations, Association of Licensed Telecoms Operators of Nigeria, Gbolahan Awonuga, said removing multiple taxes would promote a thriving telecom sector. ‘Removing the multiple taxes aimed at us will create a free flow of operations,” Awonuga had said.

A prominent economist and Chief Executive Officer, Economic Associates, Dr Ayo Teriba, commended the new direction on fiscal policy and tax reforms.

 “It is good that we do away with the multiplicity of taxes. It sounds good that we are going to eliminate these taxes,” Teriba declared while urging the committee to let the public have a shortlist of the taxes that will be eliminated and the ones that will be in force.

-Ajayi is Senior Special Assistant to President Tinubu on Media & Publicity