Nigeria braces for tax policy shake-up

Nigeria's tax policy may be experiencing a significant shake-up in the coming weeks as the newly inaugurated tax policy review committee, set up by Nigeria's Minister of Finance, Kami Adyashun, embarks on a mission to review the country's tax policies. The ultimate goal is to provide clear interpretation and steer the nation towards a more robust economic direction. The objectives of the committee were discussed by a key member, Taiwo Oyedele, Head of Tax and Corporate Advisory Services at Price Waterhouse Cooper's Nigeria (PwC Nigeria), in an exclusive interview with CNBC Africa. The genesis of this initiative dates back to 2010 when Nigeria established a study committee on taxation, culminating in the introduction of the National Tax Policy. Unfortunately, after six years, the policy remains dormant, largely unimplemented, and shrouded in obscurity for many policymakers and leaders. This lack of implementation undermines the intended strategic significance of the National Tax Policy. Tyoyi Delhi highlighted the importance of tax policy as the cornerstone of a nation's tax system, shaping its direction, priorities, and economic goals. The newly formed committee led by the Finance Minister aims to address this policy paralysis. The committee has been given a few weeks to conduct a comprehensive review of the existing national tax policy and devise strategies for its effective implementation. One of the primary concerns to be addressed is the issue of multiple taxation, a pervasive problem crippling businesses in Nigeria. Delhi shared a startling revelation from a previous study where manufacturers in a Nigerian state were burdened with a staggering 197 different taxes, leading to closures and economic disruption. The committee is adopting a collaborative approach by engaging stakeholders from diverse sectors, including taxpayers, administrators, and civil society, in the policy review process. Through two stakeholders' engagement forums and a call for memoranda, the committee aims to solicit input and feedback to inform their recommendations. Key areas of focus include simplifying the tax payment process, addressing the challenges of fiscal federalism, attracting investments, and reviewing double taxation treaties to enhance Nigeria's economic competitiveness on the global stage. The tax system in Nigeria has long been criticized for its complexity and inefficiency, with the country ranking 181 out of 189 economies in the world in terms of ease of paying taxes. The cumbersome tax regime has deterred compliance and hindered economic growth. By streamlining and modernizing the tax policies, Nigeria seeks to create a more conducive environment for businesses, both domestic and foreign, to thrive. The success of the committee's endeavor hinges on its ability to translate policy reforms into tangible outcomes that foster economic growth and development. With the support and active participation of stakeholders, the tax policy review committee endeavors to chart a new course for Nigeria's tax system, one that aligns with the nation's economic aspirations and promotes sustainable fiscal practices. As Nigeria braces for a tax policy shake-up, the implications of these reforms could ripple across the economy, paving the way for a more efficient and equitable tax system that propels Nigeria towards prosperity and success.