Presidential Committee Proposes-Temporary Fixing Of Forex-Rate For Import-Duties At N800 Per-Dollar

Presidential Committee Proposes-Temporary Fixing Of Forex-Rate For Import-Duties At N800 Per-Dollar

The Presidential Fiscal Policy and Tax Reforms Committee has proposed a temporary fix for the foreign exchange (forex) rate used for calculating Customs import duties at the budget benchmark of N800 per dollar. This move aims to stabilize business planning amid current forex market volatility.

The proposal also includes the creation of a National Revenue Service (NRS), envisioned as a central agency for revenue generation, collection, and distribution across the federating units, akin to the UK’s HM Revenue & Customs (HMRC).

Chairman of the committee, Mr. Taiwo Oyedele, highlighted the key proposals and their implications during a Public Consultation Workshop for Journalists and Public Analysts in Lagos. He emphasized the importance of a fixed forex rate for Customs duties to support business stability until the forex market stabilizes.

“Using N800 per dollar for import duties, which aligns with the budget, will help reduce importation costs and inflation, providing stability for business planning,” Oyedele explained. He noted that this measure would be temporary, aiming to ease economic pressure until December.

The committee also recommends tax reforms that focus on expanding the taxpayer base and improving the efficiency of the tax collection system, rather than increasing tax rates. By reducing the number of taxes from over 60 to a few essential ones, Nigeria can potentially increase its revenue collection.

The reforms propose removing Value Added Tax (VAT) on business inputs related to food, health, education, and transportation to lower living costs and reduce inflationary pressures. Oyedele pointed out that this would also indirectly improve living standards by incentivizing business growth and reducing costs for basic items.

In addressing concerns about potential revenue losses from VAT adjustments, Oyedele assured that the reforms would balance the impact by adjusting VAT on non-essential commodities. Corporate tax changes are also proposed to encourage compliance and support business growth, particularly for small companies.

Oyedele highlighted recent economic improvements, such as increased oil production and local petroleum refining, but acknowledged challenges like exchange rate volatility and high interest rates. He emphasized the need for the government to prioritize health, education, power, and security to rebuild trust with citizens.

Contrary to fears of increased taxation, Oyedele clarified that the government does not intend to raise taxes but aims to generate more revenue through efficient management of assets and fostering a conducive environment for tech and service exports.

The committee outlined a set of guiding principles for the reforms, including national interest, data-driven decisions, equity, and collaboration. The expected outcomes include better revenue collection, improved budgeting focused on infrastructure and human capital, and better spending through systemic corruption control and technological management.

The reforms are designed to create a more prosperous environment and drive inclusive growth, ensuring that the burden of taxation is equitably distributed, with the wealthier segments contributing their fair share.