THE chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, had said that the committee intends to achieve a tax-to-GDP (gross domestic product) ratio of 18 per cent within the next three years and close the tax gap of about N20 trillion.
Oyedele said in a statement, tagged the 10 most frequently asked questions about the committee, posted on his Twitter handle on Sunday, September 10.
“The average tax to GDP ratio for Africa excluding Nigeria is about 18 per cent. This is the basis for the target of 18 per cent and the estimated tax gap of N20 trillion,” he said.
According to him, there is a huge opportunity to generate revenue by leveraging technology and tax intelligence to close the tax gap.
“In addition, we will rationalise incentives, reduce the cost of collection, and optimise revenue from government assets and natural resources.
“This way we can generate more revenue without introducing new taxes,” the tax expert explained.
On August 8, The ICIR reported that President Bola Tinubu had inaugurated the presidential committee on tax reforms with a mandate to achieve an 18 per cent tax-to-GDP ratio within three years.
The committee is expected to achieve its mandate within one year and, in the first instance, deliver a schedule of quick reforms which can be implemented within thirty days.
Oyedele had said that Nigeria has a significant tax gap in the region of N20 trillion, The ICIR also reported.
He said to close the gap, Nigeria can raise more revenue if it lessens its revenue collection cost, which is about the highest globally.
He lamented that all manners of agencies numbering up to 63 ministries, departments and agencies (MDAs) of the government in the tax collection pool.
President Tinubu set up the committee to review and redesign Nigeria’s fiscal system concerning revenue mobilisation, tax and non-tax, quality of government spending, and sustainable debt management, Oyedele added.
The presidential tax reforms chairman hinted that the committee would engage various stakeholders, including people living with disabilities, artisans, Nigerians in the diaspora, multinational companies, and the international investment community.
He reiterated that the government does not intend to introduce new taxes or impose higher tax rates on Nigerians, maintaining that the committee mandate was to reduce the number of taxes and levies while harmonising revenue collection to reduce the burden on the people and businesses.
“The objective is to avoid taxing investment, capital, production or poverty. We plan to review and re-enact the major tax laws in a holistic manner, thereby limiting the necessity for frequent changes through annual finance acts,” the tax committee chairman said.
He clarified that no agency of the government has been stopped from collecting revenue; however, many of the agencies would rather focus on their primary functions while the committee harmonises the fragmented revenue collection functions into one agency for each government.
“This is the case in many countries, including the leading tax regimes in Africa. This reform will help to improve efficiency and enable the agencies to focus on their primary mandates for the overall benefit of the economy,” the tax reforms committee chairman said.
He also answered whether the government can be trusted to implement the committee’s recommendations.
“The committee was set up not just to advise the government but also to support the implementation of recommended reform measures. The committee’s assignment is being carried out to the highest degree of independence driven by national interest within the context of modern-day economic realities and emerging issues within the international community,” Oyedele said.