In a bid to streamline business operations and increase revenue, the Nigerian government is set to waive tax penalties, outstanding fees, and interest for companies. This move addresses concerns raised by investors about the complexity of Nigeria’s tax system, which often adds to the cost of doing business and hinders investment.
Taiwo Oyedele, Chair of the Presidential Committee on Fiscal Policy and Tax Reforms, stated, “The aim is to reduce and eliminate the complexities in Nigeria’s tax system and bring as many people as we can on board.”
Despite a notable 56 percent increase in tax receipts in 2022, Nigeria still maintains one of the world’s lowest tax collection rates at approximately 10.8 percent of GDP. This has led to a significant portion of the budget being funded through borrowing.
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To rectify this, the government is working on harmonizing revenue collection and aims to address situations where government agencies generate more revenue than states. Additionally, plans are underway to suspend multiple taxes that hinder businesses and to cease the practice of collecting taxes and fees in foreign currency.
In a bid to further bolster economic growth, an Emergency Economic Intervention bill is set to be introduced to the National Assembly by mid-November. This bill aims to receive accelerated attention for swift implementation.
The government is also looking to simplify the tax landscape, which currently comprises over 60 official taxes and levies. By creating a national portal for transparent spending, they hope to enhance accountability and efficiency in public spending on various projects. Additionally, there are plans to introduce new foreign exchange rules to combat illegal currency trading by December.
These reforms signify a concerted effort to create a more conducive environment for businesses to thrive and contribute to Nigeria’s economic growth.