Economy
2017 Tax & Fiscal Policy Prospects
By Taiwo Oyedele
Now that 2017 is here
We often have new hopes and high expectations at the turn of new events including the turn of a new year regardless of past experiences and notwithstanding our current reality.
As a country Nigeria has expectations for tax and so are individuals and organisations. To a large extent and under normal circumstances, tax should be relatively more predictable given that the rules, and administration are totally within the control of appropriate authorities. Unlike attempting to predict the weather for a whole year or other natural and supernatural events.
In any case, here are my key predictions for the tax environment in 2017 based on instinct, observable trends, behaviour of key actors in the tax system, and analysis of past patterns.
Tax Policy
There is a revised National Tax Policy awaiting government approval for implementation. It is expected that the Policy will be approved and implementation will commence but with very little traction due to vested interests and insufficient buy-in from those who need to make the required changes.
The 2017 Budget of the Federal Government of Nigeria and the 2017-2019 Medium Term Expenditure Framework have no specific proposals to increase tax rates or impose new taxes in 2017. The budget speech was silent on key tax policies but stated a commitment to align fiscal, monetary and trade policies. There are plans to revive the Export Expansion Grant scheme.
Government will focus on measures to discourage imports which suggest that import duties and waivers may be revised. Already we have seen a revision in some duty rates announced towards the end of 2016 partly designed towards the implementation of the new ECOWAS Common External Tariffs regime.
The ongoing review of tax incentives will be completed and should have a positive impact on government revenue if it addresses current abuse and plug existing leakages.
Tax Administration
Government is less bullish about non-oil revenue in 2017 compared to 2016 given the recent abysmal performance. It is expected that due to losses being reported by many companies in addition to other tax attributes such as unutilised capital allowances, the government tax take will be lower than anticipated especially from Companies Income Tax.
VAT collection is likely to improve partly due to the impact of the government social welfare scheme of conditional cash transfer and increased enforcement of compliance by FIRS but will still perform much below its potentials.
The aggressive stance by government at all levels will continue and intensify. In addition to imposition of stiff penalty and interest there is likely to be criminal prosecutions. Guidelines from the FIRS will continue to be hazy and request for rulings and direction by taxpayers may not receive prompt attention.
Internally generated revenue drive will continue to be on the front burner but still only an insignificant progress will be made due to the haphazard approach and the prevailing harsh economic condition.
It is counter-intuitive that many politicians play politics with revenue generation by placing political considerations ahead of professionalism. Unfortunately many lawmakers, administrators and policymakers lack proper understanding of the tax system. This coupled with undue political interference and vested interests mean that tax revenue will continue to be disappointingly low.
The FCT Internal Revenue Service will make some progress towards the full implementation of its mandate. Adoption and implementation of e-tax systems by various tax authorities will continue to be slow and ineffective.
More stakeholders will trigger the necessary provisions of the Freedom of Information Act to request for relevant information on tax administration, spending and expenditure control.
Some of the initiatives by the FIRS such as joint audit and use of consultants will continue to face implementation hurdles and unlikely to yield any major results. A number of tax authorities will introduce tax amnesty in order to expand the tax net and encourage voluntary compliance.
Tax Regulation
There will be some progress with the restructured Petroleum Industry Bill (PIB) with a high possibility for the governance framework being passed into law but other aspects of the Bill which are more controversial including the fiscal regime, derivation formula and host community issues will remain unresolved.
The proposed 9% Communication Service Tax will not see the light of day in its current form due to public resistance, bad timing which may be considered as insensitive and poor articulation of the justifications for the tax.
There will be some efforts to begin a comprehensive tax law review in 2017. The attempt to broaden the scope of stamp duty to cover savings account deposits, among others, will not yield any positive result as well as the plan to charge VAT on international passports.
Nigeria will sign more tax treaties for the avoidance of double taxation but ratification at the National Assembly necessary to domesticate the treaties will continue to be slow.
Tax Justice
The Tax Appeal Tribunal will be reconstituted. The aggressive level of tax audits by tax authorities especially the progress being made by the FIRS regarding transfer pricing reviews will lead to more disputes and hence a rise in tax appeal cases.
More tax disputes will be resolved in favour of taxpayers due to untenable positions taken by the tax authorities. The judiciary will generally continue to struggle with proper and timely dispensation of tax cases due to lack of in-depth tax knowledge especially in more complex situations and evolving areas.
The Global Tax Space
The OECD’s Base Erosion and Profit Shifting (BEPS) action plan will continue to be a major area of focus for tax authorities around the world. Many countries will enact new laws or amend existing ones to provide a legal framework for its implementation. However, there will be very little progress in Africa including Nigeria as many countries will be unable to make the necessary legal changes. Many more countries will subscribe to the Common Reporting Standards and join the multilateral treaties for collaboration, and exchange of information but implementation will be sketchy.
There will be some tax leaks but not at the same level and magnitude of the 2016 Panama Papers. The scrutiny of tax havens will increase and tax ‘sweetheart deals’ will be challenged both legally but more importantly from a morality standpoint.
The new ECOWAS Common External Tariff scheme will continue to experience poor implementation by member countries thereby undermining the regional integration efforts.
2017 Tax Resolutions
Just in case you do not have any New Year resolutions for tax, you need to commit to paying your taxes correctly and on time. Tax will not just be a compliance matter but a business continuity and sustainability issue. More importantly, as a taxpayer you must hold government accountable for the taxes paid. This will create more tax awareness and citizen engagement.
Overall, the tax journey in 2017 will be bumpy but I am cautiously optimistic that it will end in safe landing albeit with some bruises.
By Adedapo Adesanya
The Lagos Chamber of Commerce and Industry (LCCI) has noted that the N15.52 trillion allocation to debt servicing in the 2026 budget remains a significant fiscal burden.
LCCI Director-General, Mrs Chinyere Almona, said this on Tuesday in Lagos via a statement in reaction to the nation’s 2026 budget of N58.18 trillion, hinging the success of the 2026 budget on execution discipline, capital efficiency, and sustained support for productive sectors.
She noted that the budget was a timely shift from macroeconomic stabilisation to growth acceleration, reflecting growing confidence in the economy.
She lauded its emphasis on production-oriented spending, with capital expenditure of N26.08 trillion, representing 45 per cent of total outlays, and significantly outweighing non-debt recurrent expenditure of N15.25 trillion.
According to Mrs Almona, this composition supports infrastructure development, industrial expansion, and productivity growth.
However, she explained that the N15.52 trillion allocation to debt servicing underscored the need for stricter borrowing discipline, enhanced revenue efficiency, and expanded public-private partnerships to safeguard investments that promote growth.
She added that a further review of the 2026 budget revealed relatively optimistic macroeconomic assumptions that may pose fiscal risks.
“The oil price benchmark of $64.85 per barrel, although lower than the $75.00 benchmark in the 2025 budget, appears optimistic when compared with the 2025 average price of about $69.60 per barrel and current prices around $60 per barrel.
“This raises downside risks to oil revenue, especially since 35.6 per cent of the total projected revenue is expected to come from oil receipts.
“Similarly, the oil production benchmark of 1.84 million barrels per day is significantly higher than the current level of approximately 1.49 million barrels per day.
“Achieving this may be challenging without substantial improvements in security, infrastructure integrity, and sector investment,” she said.
Mrs Almona said the exchange rate assumption of N1,512 to the Dollar, compared with N1,500 in the 2025 budget and about N1,446 per Dollar at the end of November, suggests expectations of a mild depreciation.
She said while this may support Naira-denominated revenue, it also increases the cost of imports, debt servicing, and inflation management, with broader macroeconomic implications.
The LCCI DG added that the inflation projection of 16.5 per cent in 2026, up from 15.8 per cent in the 2025 budget and a current rate of about 14.45 per cent, appeared optimistic, particularly in a pre-election year.
She also expressed concern about Nigeria’s historically weak budget implementation capacity, likely to be further strained by the combined operation of multiple budget cycles within a single year.
Looking ahead, Mrs Almona identified agriculture and agro-processing, manufacturing, infrastructure, energy, and human capital development as key drivers of growth in 2026.
She said that unlocking these sectors would require decisive execution—scaling irrigation and agro-value chains, reducing power and logistics costs for manufacturers, and aligning education and skills development with private-sector needs.
The LCCI head stressed the need to resolve issues surrounding the Naira for crude, increase the supply of oil to local refineries to boost local refining capacity and conserve the substantial foreign exchange used for fuel imports.
“Overall, the 2026 Budget presents a credible opportunity for Nigeria to transition from recovery to expansion.
“Its success will depend less on the size of allocations and more on execution discipline, capital efficiency, and sustained support for productive sectors.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited witnessed Santa Claus rally on Wednesday after it closed higher by 0.12 per cent.
Strong demand for Nigerian stocks lifted the All-Share Index (ASI) by 185.70 points during the pre-Christmas trading session to 153,539.83 points from 153,354.13 points.
In the same vein, the market capitalisation expanded at midweek by N118 billion to N97.890 trillion from the preceding day’s N97.772 trillion.
Investor sentiment on Customs Street remained bullish after closing with 36 appreciating equities and 22 depreciating equities, indicating a positive market breadth index.
Guinness Nigeria chalked up 9.98 per cent to trade at N318.60, Austin Laz improved by 9.97 per cent to N3.20, International Breweries expanded by 9.85 per cent to N14.50, Transcorp Hotels rose by 9.83 per cent to N170.90, and Aluminium Extrusion grew by 9.73 per cent to N16.35.
On the flip side, Legend Internet lost 9.26 per cent to close at N4.90, AXA Mansard shrank by 7.14 per cent to N13.00, Jaiz Bank declined by 5.45 per cent to N4.51, MTN Nigeria weakened by 5.21 per cent to N504.00, and NEM Insurance crashed by 4.74 per cent to N24.10.
Yesterday, a total of 1.8 billion shares valued at N30.1 billion exchanged hands in 19,372 deals versus the 677.4 billion shares worth N20.8 billion traded in 27,589 deals in the previous session, implying a slump in the number of deals by 29.78 per cent, and a surge in the trading volume and value by 165.72 per cent and 44.71 per cent apiece.
Abbey Mortgage Bank was the most active equity for the day after it sold 1.1 billion units worth N7.1 billion, Sterling Holdings traded 127.1 million units valued at N895.9 million, Custodian Investment exchanged 115.0 million units for N4.5 billion, First Holdco transacted 40.9 million units valued at N2.2 billion, and Access Holdings traded 38.2 million units worth N783.3 million.
By Adedapo Adesanya
Nigerian food and beverage company, Rite Foods Limited, has extended warm Yuletide greetings to Nigerians as families and communities worldwide come together to celebrate the Christmas season and usher in a new year filled with hope and renewed possibilities.
In a statement, Rite Foods encouraged consumers to savour these special occasions with its wide range of quality brands, including the 13 variants of Bigi Carbonated Soft Drinks, premium Bigi Table Water, Sosa Fruit Drink in its refreshing flavours, the Fearless Energy Drink, and its tasty sausage rolls — all produced in a world-class facility with modern technology and global best practices.
Speaking on the season, the Managing Director of Rite Foods Limited, Mr Seleem Adegunwa, said the company remains deeply committed to enriching the lives of consumers beyond refreshment. According to him, the Yuletide period underscores the values of generosity, unity, and gratitude, which resonate strongly with the company’s philosophy.
“Christmas is a season that reminds us of the importance of giving, togetherness, and gratitude. At Rite Foods, we are thankful for the continued trust of Nigerians in our brands. This season strengthens our resolve to consistently deliver quality products that bring joy to everyday moments while contributing positively to society,” Mr Adegunwa stated.
He noted that the company’s steady progress in brand acceptance, operational excellence, and responsible business practices reflects a culture of continuous improvement, innovation, and responsiveness to consumer needs. These efforts, he said, have further strengthened Rite Foods’ position as a proudly Nigerian brand with growing relevance and impact across the country.
Mr Adegunwa reaffirmed that Rite Foods will continue to invest in research and development, efficient production processes, and initiatives that support communities, while maintaining quality standards across its product portfolio.
“As the year comes to a close, Rite Foods Limited wishes Nigerians a joyful Christmas celebration and a prosperous New Year filled with peace, progress, and shared success.”
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn