Indications emerged on Monday that tax reforms being facilitated by the Nigerian economic managers may soon effect an increase of about 18 per cent in the ratio of tax revenue to GDP.
Minister of Finance and Coordinating Minister for the Economy Wale Edun gave this clue on Monday, shortly after the Federal Executive Council meeting presided over by President Bola Tinubu.
He disclosed that the Fiscal Policy and Tax Reform Committee has been working for the past 90 days and has even impacted the economy by coming up with initial reforms as well as signposting the way forward in terms of very important targets.
According to Edun, the policy on VAT removal on diesel came from the tax administrators, who are looking to help boost the fiscal situation of the government by increasing revenue, particularly tax revenue, through digitalization, additional efficiency, and rationalisation of the range of taxes that we have at the moment.
He stated: “They are looking to increase the ratio of tax revenue to GDP to 18 per cent, which is the average for Africa; so many countries are above that level. It is actually about double where we are now and within a matter of a few years, their target is to reach 18 per cent. Other economic measures, in the short term, are being contemplated, and their report was well received by Mr. President and indeed, the whole Federal Executive Council.”
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