How should Nigeria prioritise fiscal reforms?

Nigeria has set its sights on implementing fiscal reforms aimed at deepening revenue collection systems within the country. Partner at Aelex, Theo Emuwa, shed light on the necessary reforms needed to boost tax revenues in Nigeria during an interview on CNBC Africa. One of the primary focuses is on harmonizing all revenue-collecting agencies to streamline the revenue collection process. Emuwa highlighted the importance of a well-thought-out plan to guide the implementation of these reforms, emphasizing the need for proactive measures to address existing challenges. The Nigerian government's target of doubling the revenue base presents an ambitious goal, considering the current infrastructure constraints and inefficiencies in tax collection. Emuwa stressed the significance of enhancing tax collection efforts, citing Lagos State as a model for efficient tax collection practices. He underscored the need for revenue authorities to maximize tax collection, especially in areas such as personal and corporate income tax. Despite the challenges, Emuwa expressed optimism that with a concerted effort to enforce tax laws diligently, Nigeria can significantly improve its revenue collection. In response to recent executive orders signed by President Buhari, including the suspension of the 5% excise tax on telecom services, Emuwa addressed the controversy surrounding the tax and its potential impact on the telecom industry and consumers. He highlighted the importance of aligning taxation policies with economic development goals to avoid contradictory measures that could hinder sectoral growth. Emuwa also touched on the partnership between the government and the Market Traders Association of Nigeria, emphasizing the need for a strategic roadmap to stimulate non-oil exports. The organized private sector's call for enhancing export structures aligns with the broader goal of diversifying revenue sources and reducing dependence on oil revenue. Emuwa acknowledged the dual focus required on both tax revenues and export earnings to achieve sustainable economic growth. As Nigeria navigates its fiscal reform agenda, Emuwa emphasized the imperative of expanding the tax base rather than increasing tax rates. This approach aims to broaden the tax net and improve compliance, ultimately boosting government revenues without burdening taxpayers with higher tax rates. The interview concluded with reflections on the administration's strategy to drive revenue growth through comprehensive reforms and strategic partnerships, fostering a conducive environment for economic advancement in Nigeria.