….provide 1yr non-cash palliatives in the form of Personal Income Tax reliefs for low-income earners.
…. 5% monthly gradual removal of the old notes and replacement with new notes
The Presidential Policy Advisory Council, has made recommendations for addressing revenue generation in Nigeria.
The council amongst many suggestions put forward advised for the merger of the Federal Inland Revenue Service, Nigerian Customs Service and Nigerian Maritime Administration and Safety Agency into the Nigerian Revenue Service.
This is to enhance the efficient collection of all direct and indirect taxes, as well as levies on behalf of the Federal Government.
The National Economy Sub-Committee proposed that the President should be granted special powers to drive the economic reform agenda and support the delivery of sustainable and inclusive economic growth through the passage of an Emergency Economic Reform Bill.
The council outlined specific targets to be pursued by the President within the first 100 days in office, which include the removal of fuel subsidy, sale or concession of select government assets, transition to a transparent and unified foreign exchange rate system, deepening tax collection and optimization of operating expenditure to reduce costs.
Members of the Policy Advisory Council are Senator Tokunbo Abiru (chair), Dr Yemi Cardoso, Sumaila Zubairu and Dr Doris Anite.
The council’s report highlights the need for changes in fiscal and monetary policies, industry, trade, and capital market reforms to achieve N1trn Gross Domestic Product growth and generate over 50 million jobs for citizens in eight years.
The 90 page report suggests that restructuring the Central Bank of Nigeria, as well as implementing temporary increases in fiscal circuit breakers such as debt limits, can help achieve this goal.
Additionally, the report recommends introducing reforms to achieve about $50bn-$60bn in external reserves, with a monthly inflow of at least $6bn-$8bn from export earnings and other forms of capital inflow, to support the policy at an exchange rate of N500-N600/$.
The council recommended implementing fiscal policies such as increasing domestic refining capacity to two million barrels per day and promoting economic opportunities for host communities.
To help offset the impact of fuel subsidy removal, they suggested providing one-year non-cash palliatives in the form of Personal Income Tax reliefs for low-income earners.
The advisory read, “Ramp up production capacity to four million barrels from offshore and onshore assets within four years and grow crude oil revenue and savings into ECA and NSIA.”
“Formalise illegal refineries and encourage modular refineries to create economic opportunity for the host communities.”
“Aggressively grow domestic refining capacity to 2 million barrels per day in the next 8 years, including modular refineries”
Other fiscal recommendations proposed include, “a policy directive that ensures proceeds from the sale of assets to settle existing FGN debt obligations.”
“List shares of strategic and profitable NNPC subsidiaries. Privatise, concession or sell down FGN’s stake in corporate assets to partners and other investors (possibly with a buyback option) to generate liquidity in the short to medium terms (focus on sub-optimal assets e.g., NNPCL refineries).”
“Leverage blockchain to create and provide access to a Government land registry and regionalise and concession the power transmission grid.”
It also advised a five per cent monthly gradual removal of the old notes and replacement with new notes through the deposit money banks.
They said, “Extend the December 31st, 2023 deadline to December 31st, 2024 (if required), and bring in new notes through the deposit money banks by 5% monthly and take out the old notes through the deposit money banks by the same 5 per cent to solve cash shortage.”
Furthermore, the report added “To transform Nigeria to become Africa’s most efficient trading nation, decongest the area up to 4km around the ports and designate them for cargo, roads and railway, enforce the Presidential directive on 48hr clearance of goods at seaports in line with Executive Order 001, redefine the performance measures of key agencies of government to emphasise trade facilitation and set up a whistle-blowing mechanism that enables and empowers transporters to report and escalate issues with the various authorities while transporting food and other critical items.”
