**Headline:** **
In a significant development, President Bola Ahmed Tinubu has established the Presidential Fiscal Policy and Tax Reforms Committee to review and guide reforms for Nigeria’s fiscal policy and tax system. The committee’s comprehensive terms of reference encompass Fiscal Governance, Revenue Transformation, and Economic Growth Facilitation.
**Key Recommendations:**
1. Addressing duplication of functions within the public service, promoting prudent public financial management, and optimizing value from government assets and natural resources.
2. Encourage policy signaling and collaboration among government agencies, economic management teams, and policy execution teams.
3. Utilize technology with the “Data4Tax” initiative to expand the tax base.
4. Increase personal income tax exemption thresholds and personal relief allowances.
5. Provide tax incentives for the private sector in relation to wage increases for low-income earners, transport subsidies, and net employment growth.
6. Allow Nigerian businesses to pay taxes on foreign currency-denominated transactions in Naira.
7. Eliminate obstacles to global employment opportunities for Nigerians residing in Nigeria.
8. Suspend VAT on diesel and offer tax waivers for CNG, CNG conversion, and renewable energy items.
9. Conduct a comprehensive review of tariffs on previously restricted items, including unbanned 43 items in the official forex market, and other import policies.
10. Reform Withholding Tax Regulations for simplicity and to alleviate pressure on businesses’ working capital.
11. Promote the use of mobile phones for conditional cash transfers and introduce a spending framework for subsidy removal and forex reform windfalls. This includes a national portal to track spending by the federal government, states, and local governments.
12. Suspend multiple taxes that burden the poor and small businesses, compensating with windfall revenues from certain agencies.
13. Expand the official foreign exchange market to include Bureau de Change (BDCs), forex apps, and retail forex dealers, and prohibit transactions in the black market.
14. Digitize Nigeria’s forex regime and discourage speculative demands and hoarding of foreign exchange in cash.
15. Impose excise tax on foreign exchange transactions outside the official market.
16. Implement forward contracts for the importation of Premium Motor Spirit (PMS) as a short-term measure pending improvements in key economic indices.
17. Discontinue the forex verification portal and the requirement for a Certificate of Capital Importation, and remove restrictions on repatriation and the use of export proceeds by exporters.
18. Address impediments to export promotion and bottlenecks related to Export Expansion Grants.
19. Modify Tax ProMax to allow taxpayers to make partial payments of outstanding tax liabilities.
20. Grant waivers of penalties and interest on the condition of full payment of outstanding tax liabilities on or before December 31, 2023.
These recommendations, presented by the committee, aim to address critical economic challenges in Nigeria, including exchange rate management, fuel subsidy removal, inflation moderation, and economic growth facilitation. The committee’s work is divided into three phases, with quick wins within 30 days, critical reforms within 6 months, and full implementation within 1 year. The President has received the committee’s report and is expected to consider these proposals in shaping Nigeria’s fiscal policy and tax system.
