The Presidential Committee on Fiscal Policy and Tax Reforms says it has asked the federal government to adopt an exchange rate of N800 per dollar for customs import duty.
Taiwo Oyedele, chairman of the committee, spoke on Thursday while engaging journalists on the activities of the tax panel in Lagos.
While presenting some recommendations of the committee, the tax expert expressed concern over the import duty rate, which constantly changes due to the volatility of the foreign exchange (FX) market.
This, Oyedele said, does not allow for adequate planning by businesses.
“When we did the budget, we said naira to the dollar would be N800; now it is N1,000.
”So now, we are saying, dear government, can you please sign an order that says, for the purpose of paying import duty, we shall use N800 to the dollar for the rest of the year until December?
“Since the budget benchmark is N800 to the dollar, the government will not lose anything if it adopts an exchange rate of N800 per dollar for customs import duty,” he stated.
The main thrust of the tax policy is to establish fundamental principles to guide the orderly development of the Nigerian tax system towards meeting its overall objectives.
In this regard, the policy highlights the fundamental objectives contained in Chapter 2 of the 1999 Constitution of the Federal Republic of Nigeria.
It reinforces the need for tax laws and administrative practices to promote economic development.
In recent times, the import duty rate has witnessed incessant adjustments by the Nigerian Customs Service (NCS).
On May 27, customs adjusted the FX rate for tariffs and duties to N1,480 per dollar.
Customs typically adopt FX rates recommended by the Central Bank of Nigeria (CBN) for import duties based on trading activities in the official FX market.
On May 16, Muda Yusuf, the director-general of the Centre for the Promotion of Private Enterprise (CPPE), said the customs should set a quarterly exchange rate between N800 and N1000 for import duty assessment.
According to Oyedele, the Minister of Finance shall formally re-establish and inaugurate a National Tax Policy Implementation Committee as a Standing Committee to monitor compliance, regularly review the Policy, make appropriate recommendations and prepare a draft Finance Bill in consultation with stakeholders.
The ministry, according to him, will work with the Legislature to ensure that the requisite changes to tax laws are enacted with the appropriation act of the same year.
“This would require the Executive to timeously present tax laws as executive bills for timely consideration by the National and State House of Assembly
“Apart from sensitising the public on the provisions of the Tax Policy, such a platform would facilitate feedback from stakeholders on the existing and future policy proposals.
“ Ensure alignment between tax incentives and government expenditure by providing periodic reports on tax revenue generated, tax incentives granted by all MDAs and how the tax revenue is expended.
“Ensure periodic assessment of the impact of tax expenditures on tax revenue and make recommendations on how to curtail unnecessary expenditure, “ he further disclosed.
Oyedele stated that the head of MDAs shall give a periodic report(s) to the Ministry of Finance on the level of implementation of the National Tax Policy, information exchange, and collaboration with the tax authorities.
To promote tax awareness and a tax culture in Nigeria, the federal and state tax authorities, through the Joint Tax Board, shall set aside a uniform day in the year as a National Tax Day
Tax authorities shall establish an administrative framework for amnesty and whistle-blowing as part of the strategies for curbing tax avoidance and evasion to widen the tax net.
The policy highlights the challenges confronting the Nigerian tax system and key policy principles to address them.
It recognises the roles played by key stakeholders in the development of an effective tax system and clearly states their rights and duties.
The policy also highlights the need for effective tax administration by deploying mandates, which relevant tax authorities should seek to achieve in their pursuit of an effective and efficient system.
Finally, the Policy reinforces the role of the Ministry of Finance in the formulation, coordination and, most importantly, monitoring the implementation of the tax policy on an ongoing basis.
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