The Minister of Finance, Mrs. Kemi Adeosun, has said that the Federal Government is planning to review tax policy in the country.

The Finance Minister, who said this while inaugurating a 9-man tax review committee on Wednesday in Abuja, also pledged to simplify the tax code for more effective tax system in the country.

Adeosun noted that due to government’s commitment to diversify its revenue base, there was need to overhaul the tax policy in order to harness the much needed resources necessary for sustainable economic growth and development.

While stating that the review will be a continuous exercise, in line with global best practices and in keeping with the domestic socio-economic realities, she added that the government remains committed to the “continuous improvement of our tax system as part of a dynamic framework to enhance compliance.”

She said: “As you are all no doubt aware, this administration is committed to diversifying the sources of government revenues away from oil. Oil is just 13 percent of our economy but accounts for 70 percent of government revenue.

“Our challenge is to ensure that the other 87 percent of economic activity makes its own contribution to government revenue. An effective tax system is key to this and such a system must be underpinned by an effective and appropriate tax policy.

“Nigeria has one of the lowest tax to GDP ratios in the world at just five percent. There is clearly a pressing need for an overhaul of our tax policy and this is a key function of the Ministry of Finance.

“Nigeria carried out a tax review in 2003 during the administration of President Olusegun Obasanjo.”

The minister observed that with a rapidly changing commercial environment with new business models, tax avoidance and evasion strategies among other activities, a tax policy cannot be static.

According to her, the present administration is determined to encourage businesses with a tax system that is easy to understand and comply with.

“Areas of our tax code and laws that are in need of review will be addressed as part of this exercise as will modalities for simplifying our processes and reducing the tax burden on small businesses.

“As keen as we are to grow revenues and improve our tax collection, we are equally determined to ensure that our taxes are simplified,” she added.

The tax review committee which has four weeks to complete its assignment is mandated to review the National Tax Policy (NTP) document; recommend a list of tax laws and regulations that need to be reviewed or amended; make any other suggestions on the NTP to facilitate effective implementation of the document. It would also recommend policy to ensure inter-agency cooperation between the Federal Inland Revenue Service (FIRS) and other revenue agencies toward enhancing the IGR of the Federal Government; expand the treaty network of Nigeria to include its major trading partners and review the existing Double Taxation Agreement; and ensure that tax laws are reviewed from time to time to minimise avoidable hardships to taxpayers.

•Photo showsKemi Adeosun.