LAGOS – Analysts have implored the Federal Government to consider fundamental reforms to shore up Company Income Tax (CIT) collections in the country. They maintained that the development should be driven by improving macroeconomic conditions strengthen revenue mobilisation over the medium to long term as well as to ease Nigeria’s fiscal risk Their advice came on the heels of Nigeria’s rising fiscal risk, as oil & gas revenue contribution to the Federation Account Allocation Committee (FAAC) declined due to reduction in collections from Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty, and Customs External Tariff levies (CET) Levies despite the improvements in receipts from Electronic Money Transfer Levy (EMTL) and Oil & Gas Royalties. Besides, they argued that the Nigerian Senate recent approval of four major tax reform bills, including the, Nigeria Revenue Service (Establishment) Bill, Nigeria Tax Administration Bill, Nigeria Tax Bill 2024, and Joint Revenue Board (Establishment) Bill will streamline tax administration, simplify compliance, and boost revenue for the Federal Government The International Monetary Fund (IMF) had recently urged the Nigerian government to accompany its economic stabilisation policies with targeted social welfare transfers to support the most vulnerable population. Julie Kozack , IMF spokeswoman, during a press conference at the IMF headquarters in Washington, DC.,acknowledged the challenges many Nigerians faced and emphasized the import of prioritising support for vulnerable households. “The authorities’ policies to stabilise the economy and promote growth are welcomed. “However, they must be accompanied by targeted social transfers to support the most vulnerable populations. We recognise the extremely difficult situation that many Nigerians face,” she said. She added that completing the rollout of cash transfers to vulnerable households and improving domestic revenue mobilisation should be key priorities for Nigeria. Researchers from Cordros securities in their Weekly Economic and Market Report, noted that the creation of a centralised tax authority, harmonisation of tax rules across government levels, and consolidation of various tax laws. They cautioned that failure of the fiscal and monetary authorities to boost the output capacity of real sector players in the last five years of implementing capital control measures have exacerbated exchange rate pressure, due to growing import bills. They noted that the decline was due to reduction in collections from Value Added Tax (VAT), Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Excise Duty, Import Duty, and Customs External Tariff levies (CET) Levies despite the improvements in receipts from Electronic Money Transfer Levy (EMTL) and Oil & Gas Royalties “The implementation of the bills is expected to enhance tax efficiency by streamlining administrative processes, support economic growth through targeted tax exemptions outlined in the Nigeria Tax Bill, and strengthen revenue mobilisation over the medium to long term”, they said Dr. Muda Yusuf, Founder/CEO Centre for the Promotion Of Private Enterprise (CPPE) , in a chat with Daily Independent, implored the Federal Government to enact initiatives to support employment and income, including expanding safety nets with a food component to mitigate current rising fiscal deficit Yusuf also tasked the Central Bank of Nigeria (CBN) to play a key role in pursuing unconventional monetary policies that will establish various channels to inject liquidity in the economy by expanding the options for lending to the private sector and to the government “Part of the private sector support can be offered through rediscount credit lines to banks so that they, in turn, may maintain soft lines of credit for the working capital of companies, especially small and medium-sized enterprises (SMEs), including small and family farmers. Those soft rediscount lines (or even outright grants, using a non-bank channel) should require businesses to keep employees on the payroll. “In particular, these lines of credit could be crucial to support operators in food systems (especially family farmers), the health sector, and other crucial activities”, he said. Mr. Adewale Oyerinde , Director –General of Nigeria Employers’ Consultative Association (NECA),told Daily Independent that efforts of Federal Government was needed to initiate policy measures that will also address political stability and security, legal and regulatory environment, and domestic market size as other influential variables to investors into consideration when designing fiscal strategies to attract investment and economic growth He emphasised the need for the Federal Government to the use of cost-based measures, such as tax allowances, tax credits and tax deferrals for the Federal Government. He advised that the Federal Government can mitigate the rising fiscal risk by implementing a national response plan that would focus on four interrelated spheres: health; the supply and demand of essential goods and services; the domestic financial circuit in local currency; and the foreign currency market, linked to international trade and external debt. He said: “Government must address basic supply and demand issues to prevent shortages, price spikes, and suffering in the short term. It is essential to ensure the production and distribution of food and medicines, which in turn requires keeping transportation and basic public services (water, energy, and communications) up and running. “Efficiency in government spending has to improve; there is room for substantial savings in capital outlays and operating expenditure across the three tiers of government. “In addition, the government needs to be deliberate about increasing fiscal savings through a higher accretion to the Sovereign Wealth Fund which has investment objectives of diversification and improving long term economic prospects.” According to him, for all tax categories, enhancing data management was essential to develop and maintain robust tax expenditure analysis. The Executive Director of one of the new generation banks in Nigeria, told Daily Independent that reprioritising of public spending by the three tiers of governments, the federal, states and local governments will protect critical development expenditures as well as support economic activities and access to basic services that would boost provision of relief for poor and vulnerable communities The banker advocated the need for excise reforms through policy measures, property tax reforms by updating/completing property records and Value-Added Tax (VAT) administration and plugging compliance gaps to improve revenue mobilisation as they had potential to raise over N10 trillion annually. Mr Segun Ajayi-Kadir, Director -General of the Manufacturers Association of Nigeria (MAN), in a chat with Daily Independent, suggested that the crisis-management office of the Federal Government should establish committees with the private sector and operators in key areas to monitor daily the flow of crucial goods and services, and the health of workers and critical personnel. He said that the bottlenecks, as well as hoarding and unfair trade practices, must be monitored and energetically addressed. He added: “With radical transparency, Nigeria can tap into new sources of finance, such as carbon offsets and there is room to encourage more private investment in social and physical infrastructure”