Taiwo Oyedele-led Presidential fiscal policy and tax reform Committee has called for the suspension of the value-added tax on diesel, better known as automotive petrol oil.
Oyedele who spoke on Wednesday on Channels Television’s Sunrise Daily programme said President Bola Tinubu’s directive to suspend the VAT will mitigate the negative economic effects of the elimination of gasoline subsidy.
“What the President wants us to do is that within the first 30 days, there are those low-hanging fruits that people have generally agreed that this is a problem but nobody has done anything about it.
“Personally, for example, this is not promising that it would be done, but I think that we should suspend VAT on diesel because we removed fuel subsidy on petrol and prices are going up.”
“We are going to table it before the committee. These are the things we want to do in the first 30 days,” he mentioned.
It would be recalled that Oyedele was chosen by Tinubu to lead the group, whose mandate includes fiscal governance, tax reforms, and growth facilitation. Oyedele was a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers.
Oyedele continued by saying that the Fiscal Responsibility Act specifies that the ratio of the deficit to the GDP, reporting revenue production, and the quality of spending are all part of the country’s fiscal governance.
He stated further that there’s a significant tax gap “estimated in the region of 20 trillion or even more.”
Oyedele noted that a lot of people within the tax net, especially the middle class and the elite, aren’t compliant with tax regulations, adding that “some of them are in the tax net with one or two fingers. In fact, our plan is to repeal many of the taxes that currently make doing business difficult without introducing new ones, and yet collect more.”
According to Oyedele, Nigeria has some of the lowest tax revenues in the entire globe.
He suggested that, in order for the country’s economy to profit from revenue creation, the Federal Inland Revenue Service should be given primary responsibility for tax collection, relieving the Ministries, Departments, and Agencies of the Federal Government of this responsibility.
The committee chair said, “At the Federal Government level alone, we had 63 MDAs that were given revenue targets in the 2023 budget,” adding that “these agencies are being distracted from their primary function which is to facilitate the economy.”
He also noted that the revenue collection in such agencies will be inefficient, as “they were not set up to collect revenue.”
In addition to creating millions of fresh jobs in the digital economy, Oyedele revealed that the committee will be “very intentional” in paying attention to the details.
He added that the one-year period was “purposefully” put up, with one year allotted for the implementation of its programmes.
He mentioned how the durations of 30 days, six months, and a year overlap.
According to him, “Every state should just have one law that covers everything that is collectible by local government and the state government.”
He also demanded that the appropriate authorities make such laws transparent.
