.jpg)
The Federal Government says it plans to begin the implementation of tax reforms in July 2025, if the the four bills now before the National Assembly scale through the hurdles.
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, made this known in Lagos on Saturday.
The tax reforms, backed by the Nigerian Governors Forum (NGF) just last week following extensive negotiations, are expected to receive approval by March, with implementation preparations slated for the second quarter of the year.
Oyedele, speaking at an event, The Platform, in Lagos, said the bills are expected to be be passed not later than March while further preparations for the reforms implementation would be done in the second quarter.
“We expect the tax reforms to be approved, particularly the tax reform bills in 2025,” he said.
“Our expectation is before the end of Q1 and therefore we can give notice to taxpayers to prepare themselves with capacity and begin to implement around 1st of July.”
Oyedele described the reforms as “transformational,” expressing his enthusiasm about the potential they hold.
“The reason why I have the energy to keep going is because of the possibilities I see in those reforms, which haven’t been done since independence,” he added. “Structurally, those reforms will help Nigeria. They will reduce the pressure even on the policy authorities.”
In regards to the Value-Added Tax (VAT) sharing formula, Oyedele said his committee had no objections to the amendment made by the Governors’ Forum.
The governors proposed a new formula: 50% based on equality, 30% on derivation, and 20% on population, as opposed to the original proposal of 20% on equality, 60% on derivation, and 20% on population.
While acknowledging the political elements involved in such reforms, Oyedele remarked: “You also need to consider other things, including political considerations, and so once the governors proposed their formula for sharing the VAT revenue, we have no objections to that, because, at the end of the day, if you need to move one kilometre, you don’t have to move all of that at once; you can’t even jump one kilometre at once.”
He emphasized that the proposed VAT-sharing formula would impact key sectors like agriculture, manufacturing, and other industries, urging those interested to focus on relevant sections of the bill.
Addressing Nigeria’s broader economic situation, Oyedele said that the reforms under the Tinubu administration were beginning to show positive results.
He confidently stated that the worst of the country’s economic challenges were behind them, adding that removing subsidies is the best decision we made as a country.
“We were living on window-dressed realities. If you look back to about two years ago, naira exchange rate was N450 depending on who you asked. But was our exchange rate really N450?
“If you wanted to buy petrol, it was under N200 per litre. But was it really under N200 per litre?
“There wasn’t band A at the time.
“A country can afford to sell petrol at N200 per litre if you can afford it. But there is everything wrong if you cannot afford it.
“I am a parent and will like to send my kids to school. If I can afford a school of N200 million per term, no problem. But if I cannot, they will do just first term and won’t be able to continue their education.
“Maybe they should go to a school of N200, 000 per term.
“So, Nigeria was doing worse than it ought to, and then we had this sense of “our economy was not doing great”. We thought that our economy was the largest in Africa.
“Our GDP was around $450 million. We thought our per capita income was about $2, 000 per person but it was not up to that.
“Nigeria used all its revenue to service debts. We were not paying debts back. We were just servicing it. In order words, everything we did, from paying salaries to fighting Boko Haram, we were just borrowing.
“When Nigeria borrowed, we borrowed high digits and those were the funds we were using to run the economy and service debts.
“If anybody was not losing his sleep with just that alone, then he must be from another planet. The outcome of what was happening was predictable. It was a Sri Lanka happening to us. It was a Venezuela.
“In those countries you would hold money and you wouldn’t be able to get fuel to buy. In Sri Lanka that you couldn’t drive your car every day of the week because there was no fuel.
“Our GDP growth rate was very low. Over the past 10 years, less than 10 per cent. If you do it in real-time, it is negative.
“Ways and Means was high. We were printing money to spend. We couldn’t borrow abroad because they said lending to us was risky. We didn’t have cash flow. And the capacity to borrow locally was low. So we were printing money to spend, and that is even dangerous.
“We printed close to N40 trillion naira plus interest. And we were surprised there was inflation. Nigerians don’t realise that the invisible controls the visible. And that is because the removal of subsidies is not seen physically. It is not something you can touch.
“Even some airlines stopped flying to Nigeria because of the backlog of FX debt to foreign airlines.
“There is nothing wrong with Nigeria. But maybe there is something wrong with the people ruling Nigeria.
“In America, people get killed every day by gunmen. But have you ever heard Americans say ‘may America never happen to you?’
“Let’s stop saying ‘May Nigeria never happen to you’. Maybe we can turn it into ‘May Nigeria work for me’.
“Going by available data, I personally believe that the worst is behind us.”
.jpg)
Post A Comment: