President Bola Tinubu has challenged Nigerians to be ready to pay more taxes to break the cycle of over-reliance on borrowing for public spending, which results in the burden of debt servicing. He assigned the Presidential Committee on Fiscal Policy and Tax Reforms (PCFPTR) in Abuja with improving the country’s income profile and business environment.
The Federal Government has set a main goal of achieving an 18% tax-to-GDP ratio within three years.
The group has been granted a one-year mandate to fulfil this goal, which is divided into three key priority areas: fiscal governance, tax reforms, and growth facilitation. He directed all government ministries and departments to fully cooperate with the committee in carrying out its duty.
Tinubu stated that the committee’s role is to assist the administration in meeting residents’ high aspirations for bettering their lives.
“We cannot blame the people for expecting much from us. To whom much is given, much is expected. It is even more so when we campaigned on a promise of a better country anchored on our Renewed Hope Agenda. I have committed myself to use every minute I spend in this office to work to improve the quality of life of our people.’’
Recognizing Nigeria’s existing international ranking in the tax sector, the president stated that the country still faces issues in areas such as ease of tax payment and tax-to-GDP ratio.
“We aim to transform the tax system to support sustainable development while achieving a minimum of 18 per cent tax-to-GDP ratio within the next three years. Without revenue, the government cannot provide adequate social services to the people it is entrusted to serve.
“The Committee, in the first instance, is expected to deliver a schedule of quick reforms that can be implemented within thirty days. Critical reform measures should be recommended within six months, and full implementation will take place within one calendar year,” he directed.
The formation of the group coincides with President Tinubu’s aim to remove barriers to Nigerian economic growth. Taiwo Oyedele, a seasoned specialist in fiscal policy and taxation from PriceWaterhouseCoopers (PwC), leads the committee, which was formed on July 7.
The committee is made up of members from both the commercial and governmental sectors with expertise in areas such as tax law reform, fiscal policy design and coordination, tax harmonization, and revenue administration.
Mr Oyedele assured that all members would give their all for the benefit of the nation.
“Many of our existing laws are outdated, hence they require comprehensive updates to achieve full harmonisation to address the multiplicity of taxes, and to remove the burden on the poor and vulnerable while addressing the concerns of all investors, big and small,” he said.
Oyedele expressed regret that those who avoid taxes get away with little or no punishment, emphasizing that this must change. He went on to say that evidence shows that Nigerians are eager to pay tax if they see what it entails.
Oyedele told State House Correspondents that the committee would guarantee that taxation is beneficial to Nigerians and that the proper people pay tax.
He further stated that the committee would guarantee that tax payments are made through suitable methods without suffocating the most vulnerable Nigerians.
”To safeguard vulnerable residents, the committee will not tax everything and everyone, but only those who can pay the tax. A lack of revenue indicates a lack of effective infrastructure development in the country.
‘’It’s a job that is possible with the support of Nigerians. Most developed countries that our people want to go to survive on tax instead of borrowings.’’
Oyedele stated that the group would use suitable data to develop tax policies that made tax payments simple and beneficial.
”Paying the tax will stimulate the translation of revenue to better service to residents because it involves raising revenue and determining where it will come from, such as eliminating tax multiplicity.”
”There is a significant tax gap. So, getting every taxpayer to pay within the current framework will go a long way.
”We will ensure that the FIRS is designed to unify taxes and collect for the vast majority of MDAs that are taxed to generate revenue. The MDAs will now facilitate revenue collection by focusing on their primary functions and attracting revenue,” he said.
To address the issues of various tax payments, he stated that all levels of government were involved in making it a national policy and that all stakeholders agreed on tax administration coordination.
Mr Shubham Chaudhuri, World Bank Country Representative, stated that the organization was interested in assisting Nigeria in providing basic services to its residents through efficient income collection and spending.
‘’It is part of the IMF’s goal to provide services to member nations by assisting them in raising revenue without limiting growth and eradicating poverty.
”The IMF provides services such as health care, roads, and economic development so that Nigeria may produce its revenues rather than relying entirely on borrowings to fund important projects such as healthcare, rural roads, water, and security, among others.”
According to Chaudhuri, the committee’s aims include developing standard operating procedures to help the country produce money and attract foreign investment.
”This committee will acquire citizens’ trust by making them pay gladly and ensuring that the tax they pay is used effectively to satisfy the needs that a government must supply. This means more economic opportunities for residents and the country,” he says.
Similarly, Mr Segun Ajayi-Kadir, who represents the Manufacturers Association of Nigeria (MAN) in the group, said the committee’s formation was a significant step forward in nation-building.
”Businesses have no business failing to pay taxes. All they need is confidence that the tax will be charged fairly and used to facilitate a business environment and encourage foreign partnership,” he said.
Ajayi-Kadari stated that the inclusion of MAN and other private sectors on the committee would be advantageous, as it would ensure that only the ”fruit and not the seed” gets taxed under the new policy.
Comments