Emmanuel Ochayi
In an effort to streamline Nigeria’s exchange rate system and promote economic growth, the Presidential Fiscal Policy and Tax Reform Committee, led by Taiwo Oyedele, has recommended the imposition of excise tax penalties on foreign exchange transactions conducted outside the official market.
Speaking about the proposed tax, Oyedele stated, “The imposition of excise tax on foreign exchange transactions outside the official market is part of what was proposed to the federal government.”
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This recommendation is part of a series of “quick win” proposals aimed at addressing urgent economic concerns, including exchange rate management and controlling inflation. Oyedele also highlighted other suggestions to promote transparency and encourage a single exchange rate system, including permitting the payment of taxes on foreign currency-denominated transactions in Naira and digitizing Nigeria’s forex regime.
Furthermore, the Tax Committee has recommended the suspension of multiple taxation, particularly those that burden small businesses. This move is expected to boost economic growth and development by removing impediments faced by SMEs.
Oyedele emphasized, “The suspension of multiple taxes that place burdens on the poor and small businesses, along with granting tax breaks for wage increases to low-income earners, will help drive economic growth.”
The committee’s recommendations also extend to tax waivers for diesel, CNG, and renewables, a review of tariffs on restricted forex items, and a comprehensive fiscal policy review for other prohibited imports.
This initiative aligns with President Bola Tinubu’s directive to implement these recommendations across federal government ministries and agencies, emphasizing a commitment to reforming Nigeria’s fiscal policy and tax system in multiple phases over the coming months.
