How Nigeria can achieve a sustainable fiscal system

The Nigerian Economic Summit Group (NESG) has put forward a 10-point agenda aimed at helping the Nigerian government establish a sustainable fiscal system to tackle the economic hurdles facing the country. Taiwo Oyedele, Partner and Africa Tax Leader at PwC and the Thematic Lead for Fiscal Policy and Planning at the NESG, shared insights on the proposed agenda and the critical areas that need attention in a recent interview. Oyedele highlighted the need for efficient tax collection and the urgency to address the growing fiscal deficit in the country. He pointed out alarming figures that indicate a concerning trend of the government resorting to Central Bank financing to cover expenditure surpassing generated revenue. Additionally, Oyedele emphasized the importance of governance, transparency, and accountability in fostering a conducive environment for sustainable fiscal measures. The NESG's 10-point agenda covers key areas such as tax reforms, policy implementation, legislation, and administration to enhance revenue generation and expenditure management. Oyedele stressed the significance of enforcing tax compliance among political leaders to set a moral precedent and ensure responsible management of public funds. Leveraging technology and intelligence to streamline tax processes and improve transparency in fund allocation were among the recommendations put forth by the NESG. The interview also delved into the challenges of addressing subsidy removal, inefficiencies in tax collection, and the need for tax harmonization to simplify compliance for small and medium enterprises (SMEs). Oyedele emphasized the importance of addressing inefficiencies in revenue collection as a low-hanging fruit to bolster government revenue and reduce reliance on debt financing. Looking ahead, Oyedele highlighted the role of technology in enhancing tax administration and leveraging opportunities in the digital economy for taxation. He commended the progress made by tax authorities in adopting technology for intelligence gathering and coordination. While Nigeria has refrained from signing global tax agreements concerning the digital economy, Oyedele noted the country's measured approach and emphasis on economic prudence. He acknowledged the improvements in tax filing processes and data integrity measures implemented by the Federal Inland Revenue Service (FIRS) but stressed the need for continuous enhancement and urgency in advancing fiscal reforms. Oyedele concluded by underscoring the importance of collective efforts to elevate Nigeria's revenue profile and enable sustainable economic development across sectors like education, healthcare, and infrastructure.