The Federal Government may soon impose excise tax penalties on foreign exchange FX transactions in the black market as part of its current measures to discourage multiple foreign exchange (FX) rates in the country.
The fiscal measure is one of the recommendations of the Presidential Fiscal Policy and Tax Reform Committee, established in July this year by President Bola Tinubu to evaluate and provide guidance on reforms aimed at charting a more efficient and transparent roadmap for Nigeria’s fiscal policy and tax system.
The Presidential Fiscal Policy and Tax Reform Committee, with a leading tax expert, Mr. Taiwo Oyedele, as its chairman had proposed a set of “quick win” recommendations submitted to the President at the State House in Abuja.
The key highlights of the committee’s recommendations aim to address some urgent economic challenges undermining the nation’s economic growth, such as the foreign exchangerate management, the consequences of removing fuel subsidies, controlling inflation, and promoting economic growth.
Highlighting some other developments that may be implemented in the foreign exchange market, Oyedele maintained that the recommendations were intended to promote transparency, encourage ease in business transactions as well enforce the single exchange rate system in the sector.
Some of the recommendations include “permit the payment of taxes on foreign currency-denominated transactions in Naira for Nigerian businesses; digitalise Nigeria’s FX regime and discourage speculative demands and hoarding of FX in cash; and discontinue the FX verification portal and requirement for Certificate of Capital Importation and export proceeds restriction.”
Part of the committee’s recommendations from the “Quick Win” document is that the Federal Government is also aiming to reduce the number of taxes collected at the federal, state, and local levels of government.
According to the chairman, this will ensure the removal of impediments from small and middle-scale businesses as well as bolster economic growth and development in the country.
In his X (Twitter) account, Oyedele highlighted the key developments from the committee’s findings presented to the President, stating that “imposition of excise tax on foreign exchange transactions outside the official market is part of what was proposed to the Federal Government.”
The committee’s chairman, who further gave insights into some fiscal measures that may be implemented in the FX, stated the recommendations were meant to promote transparency, encourage ease in business transactions as well enforce the single exchange rate system in the sector.
As expected, President Tinubu has directed the implementation of all recommendations by the Committee across Ministries, Departments, and Agencies (MDAs) of the Federal Government.
