The International Monetary Fund (IMF) has urged developing economies, largely Sub-Saharan economies to improve on the capacity to collect taxes to improve government’s fiscal position. It urged these economies to concentrate on eliminating tax exemptions and reducing fiscal deficits. The IMF recommends improvement in tax collection in preference to reducing critical expenditure that would invariably lead to long term reduction in growth. In Nigeria, for instance, tax exemptions and waivers is estimated to cost the federal government in excess of N6 trillion. Meanwhile, Taiwo Oyedele, the chairman of Nigeria’s President Bola Ahmed Tinubu committee on fiscal policy and taxation has said they will improve on the measures to increase the taxes the rich pays for them to reach the 18% target of tax to GDP ratio set for 2026. The current ratio is 6%.
