Adedapo Adesanya
By Adedapo Adesanya
President Bola Tinubu has directed his Special Adviser on Policy Coordination, Mrs Hadiza Usman, to coordinate with the relevant government officials to work on the 20 recommendations provided by the Presidential Committee on Fiscal Policy and Tax Reforms.
On Tuesday, Mr Taiwo Oyedele, the chairman of the committee, presented a score of reform recommendations to the President as part of efforts to help improve the nation’s revenue profile and business environment.
Mr Tinubu praised the team and assured them of his support for the review and implementation of key recommendations.
“I have listened attentively to your report. Charting the critical path forward for Nigeria’s economic recovery is crucial to all of us. I want to say thank you to your delegation,” Mr Tinubu said.
He then granted the request of the committee to address a meeting of the Federal Executive Council (FEC) and apprise cabinet members of their work and expected outcomes to facilitate economic growth.
Recall that President Tinubu in August set up a committee to review the fiscal system and the tax administration in the country
Part of the recommendations offered by the committee include measures to address duplication of functions in public service, ensure prudent public finances and management, and optimise value from government assets and natural resources.
The panel also recommended policy signalling and collaboration by MDAs, economic management, and policy execution team, the use of technology “Data4Tax” to expand the tax net, increasing personal income tax exempt threshold and personal relief allowance, and provision of tax breaks for the private sector in respect of wage increases to low-income earners, transport subsidy and a net increase in employment.
Other recommendations include allowing the payment of taxes on foreign currency-denominated transactions in Naira for Nigerian businesses, removal of impediments to global employment opportunities for Nigerians based in Nigeria, suspension of Value Added Taxes (VAT) on diesel and tax waivers on CNG, CNG conversion, and renewable energy items, and comprehensive review of tariffs on the 43 items unbanned from accessing forex in the official market and fiscal policy review of other items prohibited for imports.
The committee also said the country should attempt reforms of Withholding Tax Regulations to ensure simplicity and ease the pressure on the working capital of businesses, facilitate the use of mobile phones for conditional cash transfers, and introduce a spending framework for subsidy removal and forex reform windfall, including a national portal to track spending by the federal government, states, and local governments.
It also recommended the suspension of multiple taxes which place burdens on the poor and small businesses and compensate with windfalls revenue of certain agencies, expanding the official foreign exchange market to incorporate bureau de change (BDCs), forex apps and retail FX dealers, outlawing transactions in the black market, and digitalization of Nigeria’s foreign exchange (FX) regime and discourage speculative demands and hoarding of FX in cash as well as the imposition of excise tax on foreign exchange transactions outside the official market.
The team also called on the Tinubu administration to implement forward contracts for the importation of PMS as a short-term measure pending improvement in key economic indices, discontinue the FX verification portal and requirement for Certificate of Capital Importation and export proceeds restriction, address impediments to export promotion and bottlenecks regarding Exports Expansion Grants, and remove restrictions on repatriation and use of export proceeds by exporters, modify Tax ProMax to allow taxpayers to make part payments of outstanding tax liabilities, and grant waiver of penalty and interests on the condition of full payment of outstanding tax liabilities on or before December 31, 2023.
