The Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele, has suggested a suspension of the Value Added Tax (VAT) on Automotive Gas Oil, commonly known as diesel. This proposal comes in response to the removal of fuel subsidies, a directive given by President Bola Tinubu, in an effort to alleviate the adverse economic impacts.
Appearing on Channels Television's Sunrise Daily show, Oyedele explained that this move aims to address immediate challenges within the first 30 days. He cited the need to tackle issues that have been acknowledged as problems but have remained unaddressed.
Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers, was appointed by Tinubu to lead the committee, which focuses on fiscal governance, tax reforms, and growth facilitation. He emphasized that fiscal governance encompasses matters such as debt limits, deficit-to-Gross Domestic Product (GDP) ratios, revenue generation reporting, and expenditure quality.
Highlighting a substantial tax gap, estimated at around 20 trillion or more, Oyedele underscored that many individuals within the tax net, particularly the middle class and elite, do not comply with tax regulations. He expressed the intention to repeal certain taxes that hinder business operations without introducing new ones, all while increasing revenue collection.
Nigeria's tax-generated revenue is notably among the world's lowest, Oyedele noted. To optimize revenue generation, he recommended shifting the primary responsibility for revenue collection to the Federal Inland Revenue Service, thereby lessening the burden on Federal Government entities. He criticized the diversion of 63 Ministries, Departments, and Agencies (MDAs) from their core economic roles due to revenue targets.
Oyedele revealed the committee's commitment to a comprehensive review and detailed analysis, as well as its aim to create a million jobs in the digital economy. The one-year timeframe for policy implementation was deliberately established, with overlapping 30-day, six-month, and one-year periods.
He proposed the simplification of state-level tax laws to cover all collectibles by local and state governments, stressing the importance of transparent regulations enforced by relevant authorities.
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