The Federal Government of Nigeria aims to achieve a tax-to-Gross Domestic Product (GDP) ratio of 18% within the next three years. This ambitious target will be pursued through the enforcement of compliance with existing tax laws, as stated by the Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji.
Key Points:
- Enforcement for Compliance: The Federal Government’s strategy to reach the 18% tax-to-GDP ratio focuses on enforcing compliance with existing tax laws rather than introducing new taxes. This approach aims to address concerns in some quarters about the imposition of additional or new taxes.
- Taxation as Economic Lifeblood: Dr. Adedeji emphasized the critical role of taxation as the lifeblood of any economy. Taxes provide the necessary funding for the government to carry out its functions, implement policies, and foster overall growth and development.
- Effective and Fair Tax Policy Reforms: The chairman highlighted the importance of effective, fair, and business-friendly tax policy reforms. He stressed the need for reforms that encourage investment and innovation, positioning taxation as a tool to create an enabling environment for economic growth.
- Recognition of Challenges: Over the years, Nigeria has recognized the challenges faced by businesses and has aimed for tax policy reforms to address these challenges. The ongoing efforts focus on creating an environment conducive to economic growth, aligning with the broader developmental goals of the nation.
Summary: The Federal Government’s commitment to achieving an 18% tax-to-GDP ratio in the next three years underscores the importance of taxation in sustaining economic activities. By prioritizing enforcement of compliance with existing tax laws and pursuing fair and effective tax policy reforms, the government aims to create a favorable environment for economic growth and development.
