President Bola Ahmed Tinubu has inaugurated the presidential committee on fiscal policy and tax reforms. Daily Trust reports that the President had earlier last month…
Streamlining Tax System: Presidential Committee Inaugurated by Tinubu
Zach Adedeji, the President’s Special Adviser on Revenue, provided insight into the reduction of taxes from 52 to 10.
Conducted at the State House in Abuja on Tuesday, the inauguration event will be overseen by Tawo Oyedele, a Fiscal Policy Partner and the Africa Tax Leader at PwC.
This committee, comprising experts from both public and private sectors, will oversee diverse aspects of tax law reform, fiscal policy formulation, coordination, tax harmonization, and revenue administration.
Full Transcript of President’s Address at the Occasion:
Today signifies yet another significant step in our journey towards economic reform and the optimization of our nation’s financial operations.
2. Over the past two months since assuming office, we have taken decisive actions to recalibrate and rejuvenate our economy. My initial steps included the elimination of fuel subsidies that were straining our fiscal equilibrium. The subsequent policy move was to terminate the misuse of our nation’s resources through preferential foreign exchange systems. While these immediate measures were vital, we were fully aware that our reforms needed to penetrate deeper and wider if we were to reshape our nation and dismantle the barriers hindering our economic advancement.
3. Our administration shoulders the weight of expectations from our citizens who look to their government to enhance their lives. It’s only natural for our people to anticipate significant achievements from us. To those who have been given much, much is expected in return. This becomes even more evident considering our campaign’s pledge to build a better country anchored on our Renewed Hope Agenda. I am personally committed to using every moment in office to enhance the quality of life for our populace.
4. However, it’s important to acknowledge that all the innovative and beneficial plans we’ve charted to enhance the living standards of Nigerians will remain mere blueprints if we fail to channel the resources necessary to actualize them. Effective governance is only possible when a government can competently fulfill its obligations to the people.
5. An effective fiscal policy environment and an appropriate tax framework are essential for the effective operation of both the government and the economy. Without adequate revenue, the government cannot provide the necessary social services to the citizens it is entrusted to serve. Nevertheless, the manner in which the government procures its revenue is just as crucial as the allocation of those funds.
6. Sadly, Nigeria’s current standing on the global stage in this field indicates significant room for improvement. Our global rankings, including the ease of tax payment, paint a bleak picture. Furthermore, our tax-to-GDP ratio is one of the lowest globally and even falls below the African average.
7. The ramifications of our current tax system’s inadequacies are palpable and consequential. The inability of the government to effectively raise revenue has led to a disproportionate reliance on borrowing to finance public expenditures. A government that cannot adequately fund its activities will also lack the flexibility and fiscal capacity to sensibly manage the economy or react to external shocks.
8. Consequently, debt servicing consumes a growing portion of the government’s already limited revenue. This creates a cycle where borrowing is perpetuated solely to service previous debt, leaving minimal room for socio-economic development.
9. As the President, my commitment is to break this cycle. On my inauguration day, I pledged to address all obstacles hindering investment and economic growth in Nigeria. This commitment drove me to eliminate the fuel subsidy. It influenced the Central Bank’s decision to unify the multiple exchange rate system during my tenure. And today, we gather to inaugurate the Presidential Committee on Fiscal Policy and Tax Reforms for the same reason.
10. This committee has been established to confront the wide-ranging fiscal challenges our economy faces. Its responsibilities will be divided into three core areas:
(a) Fiscal Governance
(b) Tax Reforms
(c) Growth Facilitation
11. With this mandate in mind, the committee is tasked with formulating cost-effective and viable solutions to issues such as the proliferation of revenue collection agencies, the high cost of revenue administration, the excessive compliance burden on ordinary taxpayers, the inadequate coordination between fiscal and other economic policies at different governmental levels, and the insufficient accountability in the utilization of tax revenues.
12. Comprised of experts from both the private and public sectors, the committee’s task is significant. I have conveyed a strong mandate to them, and I anticipate their recommendations to encompass tax reform, fiscal policy design and coordination, tax harmonization, and revenue administration, among other areas.
13. Our objective is to enhance Nigeria’s revenue profile while creating a more favorable and globally competitive business environment. Our ambition is to reshape the tax system to bolster sustainable development and, concurrently, achieve a minimum Tax-to-GDP ratio of 18% within the next three years.
14. To facilitate a seamless execution, the committee is vested with not only the authority to provide recommendations but also practical assistance to the government in implementing the proposed changes.
15. The committee’s timeline for achieving its mandate is one year. It is expected to deliver a quick reform schedule that can be implemented within thirty days. Essential reform actions should be proposed within six months, with full implementation taking place within one calendar year.
16. In fulfilling its responsibilities, the committee’s guiding principle will be the welfare of the nation. We can no longer impose taxes on the impoverished when we should be fostering prosperity.
17. Our focus should shift from taxing investments and production to targeting returns, income, and consumption. Our government will tax results, not potential.
18. Our aspiration is to encourage investment and facilitate economic expansion, ensuring a sustainable avenue for growing and diversifying government revenue.
19. We will prioritize fiscal stability for all stakeholders, encompassing domestic and foreign investors, businesses, and all levels of government.
20. I direct all government agencies, ministries, and departments to fully cooperate with the committee to achieve its objectives.
21. Finally, I extend my appeal to the National Assembly, the organized private sector, the international community, and, most importantly, every well-meaning Nigerian citizen. This committee has an essential national mandate. Its task is pivotal to our nation’s fiscal well-being and our collective survival. Our responsibility now is to support the committee members in their pursuit of success. I hold the firm belief that with your backing, the Committee will achieve remarkable results for our nation, not only for today but also for generations to come.
Thank you, and may the Federal Republic of Nigeria be blessed by God.