Prof Ajibola: What Buhari’s tax regime would do to foreign investors

Prof Segun Ajibola, the former President and Chairman of the Council of Chartered Institute of Bankers of Nigeria, CIBN, said Nigeria’s 2023 Fiscal Policy Measures would scare away foreign investors.

Recall that the federal government, in a circular on April 20, 2023, hinted at the implementation of taxes on telecommunications services, alcoholic and non-alcoholic drinks, and vehicle excise duties.

In a chat with newsmen on Monday on the emerging tax regime, Prof Ajibola disclosed that the harsh tax administration system would worsen the ease of doing business index.

Accordingly, the university don said the government should concentrate on widening the tax net rather than increasing taxes.

He added that the government should expand its tax net on the informal sector to reduce revenue leakages.

“Tax revenue is a significant component of non-oil revenue in Nigeria. However, a tax regime must not stifle business. A harsh tax administration system worsens the ease of doing business index and scares away, especially foreign investors. Businesses are already complaining about multiple taxes and levies, some illegal. But rather than jerking up existing tax rates, the government should concentrate more on widening the tax net to reduce the incidence of tax evasion to the barest minimum.

“Likewise, the government should spread the dragnet to the informal sector to reduce revenue leakages. Government can tax injurious and luxurious commodities but not basic consumables. Otherwise, the welfare of the citizenry would be impaired”, he stated.