SAN FRANCISCO, October 30, (THEWILL) – The International Monetary Fund (IMF) has urged the Federal Government to revisit its policy of tax holidays and exemptions given to companies.
It urged Nigeria to implement a reform that would see it phase out tax holidays and exemptions eroding the Company Income Tax base adding that taxes imposed on tobacco and alcohol be increased to emphasise the need for socially responsible fiscal adjustment based on revenue mobilisation.
According to Amine Mati, the Senior Resident Representative and Mission Chief for Nigeria, Africa Department, IMF, the Federal Government needed to reduce interest payments on borrowed funds to about 30 per cent of the country’s revenue.
Mati, speaking in Lagos at a forum organised by the Chartered Institute of Bankers of Nigeria, said there is also a need for Nigerian policymakers to move beyond voluntary compliance measures in tax matters in order to mobilise non-oil revenue and increase the fiscal space.
On monetary policy, Mati welcomed the recent tighter monetary policy stance and said there was a need to “stop the financing of the central bank to the government and strengthen the monetary policy framework.”
On exchange rate, he told the Central Bank of Nigeria that the “recent introduction of the Investors and Exporters FX window is welcomed and there is a need to address market segmentation; remove FX restriction; simplify/unify the FX market; and improve operations of the FX market in line with market fundamentals.”
Mati noted that the Federal Government’s Economic Recovery and Growth Plan was an important step forward, adding that important policies and steps had been taken but policy action remained urgent.
