Okumagba: Tinubu’s approval of tax changes will create a more conducive business environment
…Lauds Expeditious Establishment of Committee to Drive Tax Reforms Implementation
A former Commissioner of Finance in Delta State, Olorogun Bernard Okumagba, has extolled President Bola Tinubu for, yet again, taking the bold initiative to fast track the re-boot of the nation’s economy for the benefit of all Nigerians by reducing the tax burden on Nigerians and businesses effected through the signing of four Executive Orders deferring and suspending the commencement of certain taxes paid by individuals and companies in the country.
The Executive Orders are the Finance Act (Effective Date Variation) Order 2023, which deferred the commencement date of the changes contained in the Act from May 23, 2023 to September 1, 2023 to ensure adherence to the 90 days minimum advance notice for tax changes as contained in the 2017 National Tax Policy. The second order is the Customs, Excise Tariff (Variation) Amendment Order 2023, which shifted the commencement date of the tax changes from March 27, 2023 to August 1, 2023, also in line with the National Tax Policy, while the Third Order suspends the five per cent Excise Tax on telecommunication services as well as Excise Duties escalation on locally manufactured products. The Fourth Order suspends the newly introduced Green Tax by way of Excise Tax on Single Use Plastics, including plastic containers and bottles. It also includes the suspension of Import Tax Adjustment levy on certain vehicles
In a statement welcoming the bold step taken by the Tinubu administration to entrench a robust, transformative reform in fiscal policy, and effective taxation system for the smooth functioning of the economy, the prominent APC leader in Delta State lauded the immediate establishment of the Committee on Tax Reforms headed by Taiwo Oyedele to not only advise the government on necessary tax reforms, but also drive its implementation. This, he noted, will ensure the achievement of the desired tax law reforms, harmonization of taxes and revenue administration, all of which will boost investor confidence
According to Olorogun Okumagba, with an efficient fiscal policy regime, effective taxation system driven by tax law reforms, and harmonization of taxes, amongst other measures, government will be well on track to improve our tax to GDP ratio, which is ranked one of the lowest in the world, and accounts for why the nation is heavily dependent on borrowing, even borrowing to service debts
In drumming support for President Tinubu’s agenda, the former Delta State Commissioner of Finance drew the attention of Nigerians to the numerous benefits of deferring and suspending the commencement of certain taxes paid by individuals and companies in the country.
According to him, it will ensure that Nigerian businesses are relieved of undue burden by unfavourable policies because the lack of adequate notice and clarity on the implementation of the changes has before now resulted in significant challenges for affected businesses, including rising costs, falling margins and capacity underutilization.
Other benefits for the economy derivable from the new executive orders on tax deferment and suspension, according to the former Delta State Commissioner of Finance include the need to make revenue levels more progressive and sustainable, reduce the nation’s dependence on natural resource revenues and foreign “handouts”, elevate the role of taxation in state-building and create a greater understanding of its impacts on sustainable growth.
Olorogun Okumagba commended the Tinubu government for committing to frontally tackle the key challenges in the nation’s tax system which include multiple taxes and revenue collection agencies, fragmented and complex tax system, low tax morale, high prevalence of tax evasion, high cost of revenue administration, lack of coordination between fiscal and economic policies, and poor accountability in the utilization of tax revenue.
He therefore urged the Committee on Tax reforms to expeditiously drive its primary objective to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilization of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance.
The former Commissioner of Finance in Delta State consequently requested Nigerians to rally behind the Tinubu administration in its avowed commitment to not only improve Nigeria’s revenue profile but also to create a more conducive and competitive business environment as part of its commitment to institutionalise transformative reforms in fiscal policy and taxation.
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