Tinubu’s Forex, Tax, Other Reforms Not Enough To Increase Govt Revenue- ICAN

Nigeria’s largest body of accounting professionals, the Institute of Chattered Accounts of Nigeria (ICAN) has said that more reforms need to be undertaken by the Bola Tinubu-led government in order to open up the economy for revenue generation.

The body believes that the Federal Government’s public spending is sub-optimal for the size and population of the country, which has led to its inability to fund infrastructural projects.

The ICAN President, Innocent Okwuosa, said this at the 53rd Annual Accountants Conference held in Abuja.

According to the National Bureau of Statistics, 133 million Nigerians live in multi-dimensional poverty as of 2022. However, government spending has been insufficient to address the large-scale poverty and inequality in Africa’s most populous country.

The fiscal spending approved for the full year 2023 is N21.8trn out of which N6.5trn will be to service debt, N8.3trn will be used for recurrent expenditure while only N5.7trn will be used as contribution to the Development Fund for Capital Expenditure for the year ending on the 31st day of December 2023.

The ICAN president said, “It is widely recognized that public expenditure plays a pivotal role in promoting inclusive growth. Pubic spending has a direct impact on economic growth and income distribution in both the short and long term.

“The effectiveness of public expenditure in addressing inequality and poverty hinges on several factors, inducing its scale, composition, progressivity, and funding mechanisms.

“To address these challenges and set the stage for increased public revenue and spending to enhance development outcomes it is imperative for the Nigerian government to undertake macroeconomic and fiscal reforms. Nigeria currently maintains one of the lowest levels of public expenditure and revenue in the world, which severely limits the government’s capacity to deliver essential services.”

The Tinubu-led government kick-started monetary reforms to open up the economy.

The tax reform committee inaugurated by the Tinubu chaired by Taiwo Oyedele has hinted on plans to expand the tax bracket and also reconsidering some of the tax incentives given to high-profile companies.

For Okwuosa, the reforms initiated by the Nigerian government are not adequate to deliver the country from the current economic predicament faced across sectors of the economy.

He said, “To rectify this situation, key measures should include bolstering fiscal management establishing a unified and stable market-based exchange rate and rationalizing preferential trade restrictions and tax exemptions.

“Such decisive actions would notably enhance the business environment, attract foreign direct investment, and reduce inflation.”