President Bola Ahmed Tinubu received the comprehensive report titled ‘Quick Wins within 30 days’ from the Presidential Fiscal Policy and Tax Reforms Committee. The committee, led by Chairman Taiwo Oyedele, has presented a set of 20 critical recommendations aimed at reforming Nigeria’s tax sector.
Presidential spokesperson Ajuri Ngelale announced that the President has directed the immediate implementation of all these recommendations. These proposals have been put forth to address various issues within the Nigerian tax system. Here’s the full list of recommendations:
- Measures to address duplication of functions in public service, ensure prudent public financial management and optimize value from government assets and natural resources.
- Policy signaling and collaboration by MDAs, economic management, and policy execution team.
- Use of technology “Data4Tax” to expand the tax net.
- Increase personal income tax exempt threshold and personal relief allowance.
- Tax breaks for the private sector in respect of wage increases to low-income earners, transport subsidies, and a net increase in employment.
- Permit the payment of taxes on foreign currency-denominated transactions in Naira for Nigerian businesses.
- Remove impediments to global employment opportunities for Nigerians based in Nigeria.
- Suspension of VAT on diesel and tax waivers on CNG, CNG conversion, and renewable energy items.
- 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.
- 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 FG, states, and local governments.
- Suspension of multiple taxes which place burdens on the poor and small businesses and compensate with windfalls revenue of certain agencies.
- Expand the official foreign exchange market to incorporate BDCs, forex apps, and retail fx dealers, and outlaw transactions in the black market.
- Digitalize Nigeria’s fx regime and discourage speculative demands and hoarding of fx in cash.
- Imposition of excise tax on foreign exchange transactions outside the official market.
- 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.
- Grant a waiver of penalty and interests on the condition of full payment of outstanding tax liabilities on or before December 31, 2023.
SK Blog recalls that on July 7, 2023, President Tinubu set up a Presidential Committee on Fiscal Policy and Tax Reforms, appointing Mr. Oyedele as its Chairman. These recommendations represent a significant step towards tax reform in Nigeria and will likely have far-reaching impacts on the nation’s financial landscape.