…Fiscal Policy and Tax Reforms
Between October 19 and 20, 2023, Nigerian senators gathered at the Raffia City of Ikot Ekpene, in Akwa Ibom State, to “improve knowledge” on how to make the nation’s fiscal policy and tax reforms more beneficial to the people.
It was a moment to learn and relearn. It was also an occasion to reequip, in order to intentionally work towards economic reforms that will yield more revenue for the survival of the country.
Nigeria’s fiscal policy and tax reforms have been crucial in shaping the country’s economic landscape. The previous governments had implemented various measures to enhance revenue generation, promote economic growth, and foster development. Yet, there is still a gap that needs a to b filled.
Hence, the 10th Senate committed itself to supporting the executive with the relevant legislation that would help it work towards a double-digit GDP growth. It also pledged to help target greater food security, a strengthened manufacturing base, as well as an active digital economy where young people will have ample space to fulfill their dreams and aspirations.
Those, incidentally, have been the expectations and hopes of the people, all along. Now, with an improved technical capacity to understand the impact of the fiscal policy and tax reforms, the lawmakers are expected to generate concrete and consistent legislation that would promote peace and sustainable development in tandem with the Renewed Hope Agenda of the Tinubu/Shettima Administration.
One of the key elements of Nigeria’s fiscal policy is its focus on diversifying the economy. Historically, Nigeria has often relied heavily on oil revenues, which makes the country vulnerable to fluctuations in global oil prices. To address this issue, the current government has promised to reduce the dependence on oil by promoting non-oil sectors such as agriculture, manufacturing, and services.
While President Bola Tinubu, represented by the Finance Minister, Chief Wale Edun, frowned at a situation 84 Million people are said to be “multi-dimensionally poor,” he promised to sustain the current 3% growth made in the economy. “We will ensure life is better for all Nigerians,” he said at the retreat.
For Senate President Godswill Akpabio and the senators, there should be long term plan to improve on the Internally Generated Revenue (IGR) of the country. Besides, it is time for “unbundling of the Federal Government and amendment of some laws to that effect.”
Tax reforms have played a pivotal role in developmental goals. Subsequent governments in Nigeria have implemented measures to broaden the tax base, improve tax compliance, and enhance revenue collection. These involved efforts at strengthening tax administration systems, increasing taxpayer education and awareness, and simplifying tax processes.
However, Nigeria needs more significant reforms in its tax legislation to create a more investment-friendly environment. These reforms include elimination of multiple taxes, a reduction in corporate tax rates, incentives for specific industries, and the introduction of tax holidays for targeted investments. These initiatives aim to attract foreign direct investment, stimulate economic growth, and create job opportunities.
More transparency and accountability in its fiscal policies will also generate trust in government. The government needs to implement further reforms to strengthen public financial management systems, promote budget discipline, and enhance the efficiency of public expenditure. This will ensure that public funds are properly allocated and utilised for the benefit of the Nigerian people.
Yes, fiscal policy and tax reforms are vital components of the country’s economic development strategy. By diversifying the economy, improving tax administration, and promoting transparency, Nigeria will be working towards creating a conducive environment for sustainable economic growth and prosperity.
What the nation needs, right now, in line with President Tinubu’s promise, is a people-oriented tax reforms that prioritise the welfare and needs of the Nigerian masses. The Senate and indeed, the entire national assembly, is expected to enact several specific policies and laws to back the executive plans. According to some experts, such legislations should include:
a). Progressive Tax System: This will ensure that higher-income individuals pay a higher percentage of their income in taxes. This can help reduce income inequality and provide more resources for social programs.
b). Tax Exemptions for Basic Necessities: The legislature can introduce tax exemptions or reduced tax rates for essential goods and services like food, healthcare, education, and housing.
c. Strong Anti-Corruption Measures: To ensure tax revenues are utilised for the benefit of the population, the Senate can enact laws that strengthen anti-corruption measures. This can include strict penalties for tax evasion and embezzlement of public funds.
d. Public Consultations: Regular public consultations, seeking input from citizens, experts, and relevant stakeholders while formulating tax policies are bound to be of help. This would allow for a more inclusive decision-making process and ensure that the needs and concerns of the population are adequately addressed.
e. Accountability and Transparency: The legislature can enact laws that promote accountability and transparency in tax collection and expenditure. This can include regular audits of government agencies responsible for tax administration and the publication of annual reports detailing how tax revenues are spent.
Some experts have also argued that improved fiscal policy and tax reforms, if properly managed, could help in increased investment in education and healthcare infrastructure. A significant portion of the proceeds can be used in constructing new buildings, upgrading existing facilities, and providing necessary equipment and resources.
This, it is believed, can improve the quality of education, for instance, through teacher training programs, providing modern teaching aids and technology, and enhancing the overall learning environment. Scholarships and grants can also be given to some deserving indigent citizens.
Ultimately, with a people-oriented fiscal and tax regime occasioned by the nation’s legislature, the lawmakers would have played
a crucial role in improving the quality and accessibility of necessities like education and healthcare in Nigeria, thereby creating a positive impact on the overall development of the country.
