‘Suspend multiple taxes, digitalise FX regime’ — 20 policy recommendations by Taiwo Oyedele’s tax team

October 25, 2023 1:20 am

On October 24, 2023, President Bola Tinubu directed the immediate implementation of recommendations in the ‘quick win report’ presented by the presidential fiscal policy and tax reforms committee.

The panel, headed by Taiwo Oyedele, a tax and fiscal policy expert, was inaugurated on August 8 and tasked with various aspects of tax law reforms, fiscal policy design and coordination, harmonisation of taxes, and revenue administration.

The committee’s primary objective is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilisation of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.

Tinubu had asked the committee to deliver quick reforms that can be achieved in 30 days.

The ‘quick-win’ report presented to Tinubu on Tuesday, heralds the committee’s 20 recommendations for immediate reforms in response to the president’s directive during its inauguration.

Highlighted the recommendations in a post on X, Oyodele said the work of the committee is divided into three phases, namely: quick wins within 30 days, critical reforms within six months, and implementation within one year.

“The committee has presented its reports to the President with key recommendations to address critical economic issues ranging from exchange rate management, the impact of fuel subsidy removal, moderation of inflation, and facilitating economic growth,” the tax expert said.

QUICK REFORM TO BE IMPLEMENTED BY MDAS

The recommendations, according to a statement by Ajuri Ngelale, special adviser to the president on media and publicity, are expected to be carried out by ministries, departments and agencies MDAs.

Here are the key recommendations presented to the president.

Measures to address duplication of functions in public service, ensure prudent public financial management and optimize value from government assets and natural resources

Policy signalling 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 break for private sector in respect of wage increases to low-income earners, transport subsidy and 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 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.

Digitalise 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 with the FX verification portal and requirement for certificate of capital Importation and export proceeds restriction.

Address impediments to export promotion and bottlenecks regarding export expansion grants, and remove restrictions on repatriation and use of export proceeds by exporters.