Zacch Adedeji: We must diversify revenue sources | Over-reliance on oil makes economy volatile

Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), says Nigeria must seek ways to diversify revenue sources and reduce over-reliance on oil. 

Adedeji spoke on Saturday at a retreat on fiscal policy and tax reforms for senators in Abuja.

Speaking at the retreat, the FIRS boss said with Nigeria’s vast potential, there is a need to address the challenges and opportunities presented by “our fiscal policies and tax systems”.

“Nigeria’s fiscal policy is the cornerstone of our economic stability. It dictates how the government collects, manages, and allocates resources for public welfare,” Adedeji said.

“A well-structured fiscal policy is essential to provide the necessary infrastructure, healthcare, education, and social services for our growing population.

“It is equally crucial in ensuring that our economic environment remains competitive for both domestic and foreign investors.

“Tax reforms are integral to a robust fiscal policy. Our current tax system, though making significant contributions to our revenue, has room for improvement.

“We must focus on simplifying the tax laws, enhancing compliance, and broadening the tax base to ensure fairness and equity. This will stimulate economic growth and reduce the burden on individuals and businesses alike.

Adedeji said the agency has taken substantial measures to improve tax collection efficiency, reduce tax evasion, and foster a business-friendly environment.

But he said more needs to be done.

“In addition to reforms, we must also explore avenues for diversifying our revenue sources,” he added.

“Over-reliance on oil revenues has exposed our economy to volatility, as witnessed in recent years.

“Diversification of revenue sources will not only bolster our fiscal resilience but also enable the government to better serve the people and address our most pressing needs, especially lifting our people out of poverty.

“As we deliberate on fiscal policy and tax reforms, we must bear in mind the need for social inclusion and poverty reduction.

“Our incentives must be targeted and rationalised to limit abuse and avoidable leakages while promoting investment and job creation.”

Adedeji further called for collaboration, adding that diligent efforts, and innovative thinking, can forge a path to more equitable fiscal policies and tax reforms that will lead the country to a new era of prosperity.