Excise Taxes On Parallel Market Transactions May Be Levied By FG

The federal government's efforts to prevent the use of different exchange rates in the nation may soon include the enforcement of excise tax penalties on foreign exchange transactions carried out outside the official market window.

This is one of the twenty suggestions made by the Presidential Fiscal Policy and Tax Reform Committee, which was set up in July by President Tinubu to assess and offer recommendations on reforms aimed at reshaping Nigeria's fiscal policy and tax structure.

The Tax Committee put out a number of "quick win" suggestions under the direction of Taiwo Oyedele.

These suggestions are intended to address pressing economic issues like managing exchange rates, the fallout from eliminating fuel subsidies, reining in inflation, and stimulating the economy.

These suggestions are intended to address pressing economic issues like managing exchange rates, the fallout from eliminating fuel subsidies, reining in inflation, and stimulating the economy.

The imposition of an excise tax on foreign exchange transactions that take place outside of the official market is one of these recommendations.

Oyedele claims that this action will guarantee the removal of obstacles from small and medium-sized enterprises and support the nation's economic development.

The expansion of SMEs is hampered by the over 60 separate tax systems that are now in place across various tiers of government, the majority of which are targeted at the informal sector.

Therefore, the following are some of the recommendations:

"Suspension of multiple taxes which place burdens on the poor and small businesses and compensate with windfalls revenue of certain agencies. 

"Tax break for private sector in respect of wage increases to low-income earners, transport subsidy and net increase in employment. 

"Grant waiver of penalty and interests on the condition of full payment of outstanding tax liabilities on or before 31 December 2023. 

"Remove impediments to global employment opportunities for Nigerians based in Nigeria."

Other recommendations include tax waivers for diesel, CNG, and renewables as well as a comprehensive review of tariffs on the 43 items unbarned from accessing forex in the official market and a fiscal policy review of other items prohibited for imports.