President Bola Tinubu has launched a Presidential Committee focused on fiscal policy and tax reforms. The announcement was made on Friday by Dele Alake, the President’s Special Adviser on Special Duties, Communications, and Strategy.
The committee will be headed by Mr. Taiwo Oyedele, a respected expert in fiscal policy and African tax leadership at PriceWaterhouseCoopers (PwC). It will consist of professionals from the public and private sectors who will be responsible for addressing various aspects of tax law reform, fiscal policy design, coordination, tax harmonization, and revenue administration.
According to Mr. Adelabu Zacch Adedeji, the President’s Special Adviser on Revenue, President Tinubu recognizes the importance of a strong fiscal policy environment and an efficient taxation system for the effective functioning of the government and the economy.
Adedeji highlighted the low global ranking of Nigeria in terms of ease of tax payment and the country’s tax to GDP ratio, which is one of the lowest in the world and below the African average. This has led to excessive reliance on borrowing to fund public expenditure, resulting in limited fiscal capacity as debt service costs consume a larger portion of government revenue each year. This perpetuates an unfavorable cycle of inadequate funding for socio-economic development.
While acknowledging some progress made in recent years, Adedeji emphasized that the outcomes have not been transformative enough to change the current situation. He outlined several key challenges in Nigeria’s tax system, including multiple taxes and revenue collection agencies, a complex and fragmented tax structure, low tax morale, widespread tax evasion, high costs of revenue administration, lack of coordination between fiscal and economic policies, and insufficient accountability in tax revenue utilization.
The committee’s main objective is to enhance the efficiency of revenue collection, ensure transparent reporting, and promote effective utilization of tax and other revenues. This aims to boost citizens’ tax morale, cultivate a positive tax culture, and encourage voluntary compliance.
The Special Adviser on Revenue emphasized that the goal is to overhaul the tax system to support sustainable development and achieve a minimum tax to GDP ratio of 18% within the next three years, without stifling investment or economic growth. It’s important to note that the committee will not only provide advisory recommendations to the government but will also take the lead in implementing them, aligning with the comprehensive fiscal policy and tax reform agenda of the current administration.
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