The Federal government is considering significant tax reforms that could lead to an 18% surge in the ratio of tax revenue to GDP, according to statements made by Minister of Finance and Coordinating Minister for the Economy, Wale Edun, after the Federal Executive Council meeting chaired by President Bola Tinubu.
Edun revealed that the Fiscal Policy and Tax Reform Committee has been actively working for the past 90 days, formulating initial reforms and outlining crucial targets for the economy.
The proposed reforms, driven by the tax administrators, include the policy to remove VAT on diesel, aimed at boosting the government’s fiscal position by enhancing revenue, especially through digitalization, increased efficiency, and the streamlining of existing taxes.
Edun stated that the committee aims to raise the ratio of tax revenue to GDP to 18%, aligning with the African average.
Currently, this ratio is about half of the target, and the committee envisions achieving this goal within a few years.
The minister highlighted that the committee’s report, which includes additional short-term economic measures, received positive feedback from President Bola Tinubu and the entire Federal Executive Council.
The proposed tax reforms indicate a strategic move to strengthen the nation’s fiscal position and enhance revenue streams for sustainable economic growth.
