IMF urges Nigeria to slow down on its aggressive tax drive due to COVID-19 impact

The International Monetary Fund (IMF) has urged Nigeria to slow down on its aggressive tax drive due to the impact of the COVID-19 on businesses and households, according to a news report by This Day.

The fund, however, told the federal government to continue to push for policies that are supportive of its citizens, even as it commended the monetary policy initiatives that have been introduced by the Central Bank of Nigeria (CBN) to cushion the impact of the pandemic on the people.

The Director of the IMF's African Department, Abebe Selassie, said this on June 29 during a media briefing on the latest Regional Economic Outlook for Sub-Saharan Africa, held in Washington.

Selassie said, "Nigeria is an oil-exporting country; so, the impact of the pandemic is being compounded by the sharp decline in oil prices. We are projecting that Gross Domestic Product (GDP) growth would contract around 5.4 percent this year; so, it's a very significant hit to income. It will be very important to have a very nimble policy response to ensure that the hit to the economy is not compounded by policy challenges."

"This is not the time to be aggressively introducing new tax measures but there is a long-standing challenge on the fiscal side of needing to have sufficient resources generated by the government from non-oil sources to provide investments in health, education, and infrastructure. So, there is that long-term agenda that needs to be addressed. Right now, fiscal policy can be supportive and needs to be supportive, "he added.