President Bola Tinubu established the Presidential Fiscal Policy and Tax Reforms Committee to review and advise on reforms to shape Nigeria’s fiscal policy and tax system, and it has submitted 20 Recommendations For Implementation.
The terms of reference of the Committee include Fiscal Governance, Revenue Transformation, and Economic Growth Facilitation.
The committee’s work is further divided into three phases: Quick Wins within 30 days, Critical Reforms within 6 months, and Implementation within a year.
The committee presented its reports to the President, along with key recommendations to address critical economic issues such as exchange rate management, the impact of fuel subsidy removal, inflation moderation, and economic growth facilitation. Among the key recommendations are, but are not limited to:
1. Measures to address function duplication in government, ensure prudent public financial management, and maximize the value of government assets and natural resources.
2. Policy signaling and collaboration among MDAs, economic management, and policy implementation teams.
3. Use of “Data4Tax” technology to broaden the tax net.
4. Increase personal income tax exempt threshold and personal relief allowance.
5. Tax break for private sector in respect of wage increases to low-income earners, transport subsidy and net increase in employment.
6. Permit the payment of taxes on foreign currency denominated transactions in Naira for Nigerian businesses.
7. Remove impediments to global employment opportunities for Nigerians based in Nigeria.
8. Suspension of VAT on diesel and tax waivers on CNG, CNG conversion, and renewable energy items.
9. 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.
10. Reforms of Withholding Tax Regulations to ensure simplicity and ease the pressure on working capital of businesses.
11. 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 FG, States and local governments.
12. Suspension of multiple taxes which place burdens on the poor and small businesses and compensate with windfalls revenue of certain agencies.
13. Expand the official foreign exchange market to incorporate BDCs, forex apps and retail fx dealers, and outlaw transactions in the black market.
14. Digitalise Nigeria’s FX regime and discourage speculative demands and hoarding of FX in cash.
15. Imposition of excise tax on foreign exchange transactions outside the official market.
16. Implement forward contracts for the importation of PMS as a short-term measure pending improvement in key economic indices.
17. Discontinue with the FX verification portal and requirement for Certificate of Capital Importation and export proceeds restriction.
18. Address impediments to export promotion and bottlenecks regarding Exports Expansion Grants, and remove restriction on repatriation and use of export proceeds by exporters.
19. Modify Tax ProMax to allow taxpayers to make part payments of outstanding tax liabilities.
20. Grant waiver of penalty and interests on the condition of full payment of outstanding tax liabilities on or before 31 December 2023.
