Taiwo Oyedele, the Chairman of the Presidential Fiscal Policy and Tax Reform Committee, has stated that the Nigerian government experiences an annual loss of N6 trillion due to outdated tax incentives,Daily Trust reports.
During a press briefing organized by the Ministry of Finance, Oyedele disclosed this information. He emphasized that the current administration is in the process of reevaluating some of these tax incentives to prevent financial leakage.
He explained, “As part of our mandate, we are presently reevaluating certain tax incentives within the country. For instance, there are incentives established in the law to aid the country’s post-civil war reconstruction, which have become outdated. Neglecting to address such issues poses challenges.”
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“Our findings indicate that we lose approximately N6 trillion due to these tax incentives. This is why we have decided to review them and introduce disincentives that can stimulate the economy, ultimately aiming to increase our tax-to-GDP ratio to 18 percent within three years.”
Oyedele also mentioned that the committee plans to streamline incentives to reduce the tax gap, encouraging individuals to pay essential taxes, which could potentially yield N20 trillion.
Earlier, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, emphasized that the federal government has plans to create opportunities that attract Foreign Direct Investment (FDI). He noted that relying on 90 percent of revenue to service debts is unsustainable.
Edun further elaborated, “We also need to establish avenues for attracting FDIs and encourage Nigerians to invest. Many Nigerians hold significant foreign exchange in their domiciliary accounts, which can be channeled to stimulate the economy. In addition, we are exploring ways to enhance diaspora remittances and encourage Nigerians abroad to invest in the country.”
Additionally, Mele Kyari, the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation Ltd (NNPCL), pointed out that oil consumption has decreased by 30 percent, from 66.7 million to 46 million barrels per day, following the removal of fuel subsidies. He also highlighted that oil production, which had been consistently low at around one million barrels per day (mbpd), has now significantly increased to 1.6 mbpd.
