Speaking at the inauguration of the presidential committee on fiscal policy and tax reforms on Tuesday, August 8, the president said: “The consequences of the ongoing failure of our tax regime are real and significant.
The inability of the government to efficiently raise revenue has led directly to an over-reliance on borrowing to finance public spending.
A government that cannot properly fund itself will also lack the flexibility or fiscal scope to sensibly manage the economy or respond to external shocks.
Instead, debt service begins to consume an ever greater portion of the government’s already meagre revenues.
This traps the economy in a vicious cycle of borrowing simply to service previous debt and leaves almost no scope for socio-economic development.
As President, I am determined to end this cycle. On the day of my inauguration, I promised that my administration would address all of the issues impeding investment and economic growth in Nigeria.
This promise is why I saw an end to fuel subsidy. It is the reason the Central Bank has called an end to its multiple exchange rate system under my watch.
It is for the same reason we gather here today (yesterday) to inaugurate the Presidential Committee on Fiscal Policy and Tax Reforms.
Our target is to improve Nigeria’s revenue profile while making the business environment more conducive and internationally competitive.
Our aim is to transform the tax system to support sustainable development, while, at the same time achieving a minimum of 18% Tax-to-GDP ratio within the next three years.”