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Tag: tax-cuts

  • Nigeria targets tax cut with major reforms to boost efficiency

    Nigeria targets tax cut with major reforms to boost efficiency

    The Presidential Committee on Tax Reforms and Fiscal Policy says it is determined to simplify the excessive number of collectable taxes and levies, currently exceeding 60, aiming to reduce them to fewer than 10 at all levels of government.

    Chairman of the Committee, Taiwo Oyedele, made this known when he addressed State House Correspondents on Tuesday.

    He stated, “Our aim is to consolidate these taxes at all levels of government, reducing the total number to less than 10.”

    Oyedele also noted the burden posed by the existing plethora of taxes and levies, stressing that around 96 per cent of the total revenue collected by the federal, state, and local governments is derived from a small set of fewer than 10 taxes.

    The Chairman expressed the critical nature of revising Nigeria’s taxation laws and regulations, noting the committee’s engagement with the Senate and the House of Representatives to address necessary reforms.

    In the context of the controversy surrounding the Value Added Tax (VAT) law, Oyedele stressed the need for Nigerians to come together to find solutions rather than relying on the courts.

    He announced that the committee has initiated public consultation and stakeholder engagement and has already received input from every state in Nigeria.

    Regarding the need for constitutional amendments for most of the reforms, Oyedele pointed a lack of clarity regarding taxing rights between levels of government as a major challenge.

    He stated, “We have over 60 taxes and levies, officially collectable by federal government, state government, and local governments. Unofficially, those taxes number over 200, making life difficult for our people.”

    The Chairman also discussed the shift in tax structure and revenue generation, highlighting that having a higher number of taxes does not necessarily lead to increased revenue and can create opportunities for financial leakages.

    In the second phase of the committee’s report, critical reforms will be revealed, addressing the multiplicity of taxes and rewriting major tax laws.

    Oyedele shared that the committee has been actively engaging with various key stakeholders, including policymakers, to put the framework in place for implementing their recommendations.

     

  • UK’s PM fires new finance minister Kwasi Kwarteng

    UK’s PM fires new finance minister Kwasi Kwarteng

    BRITISH Prime Minister Liz Truss on Friday fired Finance Minister Kwasi Kwarteng after less than six weeks in the role, amid mounting political pressure and the government’s controversial growth plan.

    His sack comes barely a day after he admitted in an interview with The Telegraph, that he had faced a “baptism of fire” in the job but vowed to fight on, saying: “I really enjoy the Treasury.”

    The British-born Ghanaian was appointed Chancellor of the Exchequer on September 6, 2022 and he swiftly announced a set of economic policies named “The Growth Plan 2022” in what the Treasury described as a “fiscal event”; this was dubbed a “mini-budget” by the media.

    The Growth Plan 2022 which promised large tax cuts for the wealthy, had triggered major backlash both from the public and the markets in recent weeks.

    “It is clear that parts of our mini-budget went further and faster than the markets were expecting,” Truss said in a brief press conference.

    The Prime Minister had vowed to enact sweeping tax cuts if she was voted into power, ignoring concerns that this would further fuel inflation and the mini-budget included tax cuts that would mostly benefit the wealthiest Britons along with other tax cuts, while also attempting to subsidize spiraling energy costs for households and businesses.

    If implemented, the policy would have significantly increased government borrowing, a prediction that spooked markets in late September and caused the pound to crash, forcing the government to climb down and scrap the planned tax cut for high earners.

    In his resignation letter, Kwarteng admitted that the “economic environment” had rapidly changed since the announcement of his mini-budget but reiterated his opposition to “high taxation” which he says “must still change” to ensure economic growth.

    “It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches,” he said.

    Kwarteng’s exit and Truss’ policy u-turns raises questions about her own future as prime minister, amid growing signs of rebellion inside her party. According to the BBC, several senior members of the Conservative Party are planning to publicly urge Truss to resign.

    The report notes that many of these senior lawmakers include former cabinet ministers who believe Kwarteng was simply carrying out Truss’ policies and therefore she should be the one who should have stepped down.

    The British pound slumped further to $1.12, down 0.4%, after news of Kwarteng’s exit became public and conservative lawmaker Jeremy Hunt has been appointed as the country’s fourth chancellor in a tumultuous year for the party.