President Bola Tinubu of Nigeria on Tuesday, August 8, affirmed his commitment to breaking the country’s borrowing spree that he noted was an impediment to efficient management of government revenue.
Speaking during the inauguration of the Presidential Committee on Fiscal Policy and Tax Reforms, Tinubu stated that his government is resolute on revamping Nigeria’s tax system which would, in turn, slow down over reliance on borrowing.
Tinubu acknowledged that Nigeria was lagging behind in terms of tax collection despite being Africa’s largest economy.
The Presidential Committee on Fiscal Policy and Tax Reforms will first recommend a schedule of short term reforms within 30 days and later suggest more critical measures in six-months time.
Once implemented, the new reforms will help Nigeria achieve a minimum of 18% tax-to-GDP ratio in a span of three years.
“Our aim is to transform the tax system to support sustainable development while achieving a minimum of 18% tax-to-GDP ratio within the next three years,” remarked President Tinubu.
”Without revenue, the government cannot provide adequate social services to the people it is entrusted to serve.”
Furthermore, the President restated the government’s resolve to improve the lives of Nigerian people adding that electorate was expecting transformation.
Nigeria Debt Quagmire
Nigeria, as is the case in several other African countries, is grappling with runaway debt that with signs of running out of control.
In early 2023, Nigeria’s Debt Management Office reported that the total debt was to hit $172 billion (N77 trillion) in 2023 as the Treasury resorted to borrowing and bonds to finance expenditure.
The upshot of the enormous debt has been struggles in debt servicing which together with other challenges including the depreciating Naira pose significant challenge for its economy.
After transforming the revenue system in the State of Lagos during his tenure as Governor, Tinubu now hopes to make an impact in Nigeria’s tax collection and consequently liberate the country from the shackles of excessive borrowing.