The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, unveiled the government’s plan to address the issue of excess liquidity in the system during a press conference yesterday.
Speaking after a meeting with investors at the ongoing Spring Meetings of the IMF and World Bank in Washington DC, Mr. Edun emphasized the collaboration between fiscal and monetary authorities to combat inflation and stabilize the economy.
“We will pin down Ways and Means to alleviate the pressure of the excess money in the system,” Mr. Edun stated.
“By so doing the two authorities are working hand in hand to bring down inflation and pressure on price stability and stabilising the exchange rate, with the target of bringing down interest rate so that investors can borrow at a more affordable rate and getting the economy going in the right direction again.
“We need to borrow less and focus more on domestic resource mobilisation. We want long-term resources to avoid repayment and refinancing pressures.”
Furthermore, Mr. Edun addressed the need for tax reforms, pointing out that Nigeria’s tax-to-GDP ratio is lower than the African regional average.
He outlined plans to streamline the tax system, leverage technology for efficient tax collection, and double tax revenue within three years.
His words, “At 10 per cent to GDP, what should I say, it would appear as if some people are not paying their taxes.
Our strategy is to increase the tax revenue without increasing the rate of taxes. We want to deploy technology to make tax collection more efficient.
“Our analysis has shown that 90 per cent of tax revenue comes from nine tax heads while we have over 80 taxes from federal, through states to local councils.
“Mr. President eleven if we eliminate the large number of these taxes and concentrate on the nine that yield the current 90 per cent revenue and deploy technology, there will be more efficiency and we will be able to double our tax revenue in about three years.
“If we eliminate the large number of taxes and bill people properly we will gain in terms of the peoples’ willingness to pay and you will collect more revenue.”