FG inaugurates national tax policy document committee

The Federal Government on Wednesday inaugurated an eight-man committee tor review and update the National Tax Policy document.
The Minister of Finance, Kemi Adeosun, while inaugurating the committee in Abuja, said the government was committed to the continuous improvement of Nigeria’s tax system as part of the dynamic framework to enhance compliance.

Adeosun said the review was to address areas of tax code and laws that were in dire need of review.

She also said it would address modalities for simplifying the nation’s tax processes and reducing the tax burden on small businesses.

The minister said the NTP was introduced in 2012 with a set of fundamental principles, which should serve as guide in determining what legislative and administrative action the tax system may require.

She, however, said the document was finalised without any additional updates and was yet to be fully implemented.

She said: “In a rapidly changing commercial environment with new business models, tax avoidance and evasion strategies among other activities, a tax policy cannot be static.”

According to Adeosun, the present administration is committed to diversifying the sources of government revenues away from oil, which is just 13 per cent of the nation’s economy, but accounts for 70 per cent of government revenue.

She said the challenge was in ensuring that the other 87 per cent of economic activity made its own contribution to government revenue.

She said: “An effective tax system is key to this and such a system must be underpinned by an effective and appropriate tax policy.

“Nigeria has one of the lowest tax to GDP ratios in the world at just 5 per cent.

“There is clearly a pressing need for an overhaul of our tax policy and this is a key function of the Ministry of Finance.”

Adeosun said the task of growing tax revenue must be pursued with a human face and sustainability in focus.

The committee has as its terms of reference: recommendation of a list of tax laws and regulations that need to be reviewed or amended and review the NTP document.

It is to make other suggestions on the NTP to facilitate effective implementation of the document and ensure that tax laws are reviewed from time to time to minimise avoidable hardships on taxpayers.

It is also to recommend a policy to ensure inter-agency cooperation between the Federal Inland Revenue Service and other revenue agencies toward enhancing the Internally Generated Revenue of the Federal Government.

Adeosun also said the committee was to expand the treaty network of Nigeria to include its major trading partners and review the existing Double Taxation Agreement.

Adeosun said the committee had four weeks to complete the assignment and promised it that its recommendations would be speedily implemented.

She also said the review would be continuous as a means of evolving with global best practices and keeping with the domestic socio-economic realities.

The eight member committee has as its chairman Dr. Abiola Sani from the University of Lagos.

Other members were drawn from the FIRS, Joint Tax Board, the Ministry of Finance and the private sector.

Sani, on behalf of the committee, promised that it would deliver, adding that taxation was the oxygen of any country, but its success depended solely on its policies.

“Although it is challenging to do this within four weeks, we will do our best so as not to disappoint the nation,” Sani added.