Fiscal policy

Abuja, Oct. 25, 2023: The Presidential Committee on Fiscal Policy and Tax Reform (PCFPTR) says it is working assiduously to remove impediments to businesses and trade in the country.

Mr Taiwo Oyedele, Chairman of the PCFPTR, stated this while briefing State House Correspondents, shortly after the committee met with President Bola Tinubu, on Tuesday at the presidential villa, Abuja.

Oyedele explained that the committee was mandated by President Bola Tinubu to help reform the fiscal system and the tax administration.

” The work we have been given to do has three pillars. One is fiscal governance and issues to do with fiscal policy coordination with monetary policy; issues to do with respect for legal thresholds.

” And debt to GDP, debt service to revenue ratio, deficits in the budget as a ratio of GDP and so on and so forth. More importantly also is the coordination with sub-national.

” The second pillar of our work is revenue transformation, which is where we’re looking at both non-tax and tax revenues, including how do you optimize value from government assets and natural resources.

” How do we gain more efficiency from government-owned enterprises so that they can yield returns for the Nigerian people.”

He said the third leg or pillar of the work of the committee was to deal with economic growth facilitation.

” Now, the principle behind this is that at the end of the day, the most sustainable way for any country to generate revenue is to grow the economy, when businesses succeed, when individuals prosper, they pay taxes. For us that’s the most fundamental.

” So we’re looking at how can we remove impediments to businesses, to trade, to you know even think about young Nigerians, many of them, very smart and intelligent.

” But today we have legal and tax impediment that will not allow global organisations to hire Nigerians in Nigeria to work within the global value system.

” You call some call centers and an Indian speaking, we think our English is better than the Indians. Why are they not hiring our young people?

” So we’ll remove those impediments so that people can then gain employment, earn dollars while they’re here in Nigeria, which not only helps with our foreign exchange management, but ensures that people also have prosperity to lift themselves and families from poverty.

” And of course, they’ll pay taxes on the income to the government. ”

He said that the committee had been working very hard since it was inaugurated, adding that it have six subcommittees which they meet every single day.

” There’s a subcommittee meeting every single day, sometimes we have two meetings in a day. For us that’s the sense of urgency in dealing with issues that are affecting our country.

” Though we did not present the report to the President exactly when it was 30 days because he was busy outside the country with very important engagements.

” What we have done since then was to start speaking to the various policymakers, from the Central Bank of Nigeria leadership to the Finance Minister, who is also the Coordinating Minister for the Economy.

” To the Federal Inland Revenue Service (FIRS) and the Joint Tax Board, and even two state governors.”

He stated that the committee held sessions with the Senate, noting that it had been actively engaging with various key stakeholders trying to put the framework in place for implementing its recommendations.

” So all we did today was to formally present the report to Mr President, but I will say that once we get the nod from him, it will be like just switching on the tap and then the implementation starts immediately.

” There’s so much work for us to do, this is just Milestone #1, it is what we call the quick wins. The second phase, which is where we are now, is the critical reforms.

” Those critical reforms involves even rewriting our major tax laws, addressing something that everybody in this room will be very much familiar with; multiplicity of taxis. ”

He said that there are over 60 taxes and levies, officially collectible by the Federal, States and Local Governments.

” Unofficially, those taxes are over 200, making life difficult for our people. So the objective we have, and that’s what we’re working towards, is to bring all of that to a single digit.

” So the taxes at all levels of government combined, we think should be less than 10 because actually about 96 per cent actually more than that, of our revenue across Federal, States and Local governments, currently is generated from less than 10 taxes.

” And we’ve seen countries like South Africa generating more than our entire national tax revenue from just one tax.”