The International Monetary Fund (IMF) has asked the government to implement a reform to phase out tax holidays and increase taxes imposed on tobacco and alcohol. This was announced by IMF Resident Representative in Nigeria, Mr Amine Mati who said this at a forum in Lagos at the weekend.
Mati also seeks a reduction of interest paid on borrowed funds to about 30 per cent of the country’s revenue, and a lower tax rate to increase compliance from companies and individuals.
Meanwhile, the IMF has said that economic growth in sub-Saharan Africa forecast an increase to 3.4 per cent in 2018 from its 2.6 per cent in 2017. The organisation expressed this in a report on sub-Saharan Africa’s economic outlook released on Monday. It was noted that public debt is likely to rise at 53 per cent of GDP this year from 48 per cent in 2016.
Furthermore, according to the report, the ongoing political uncertainty in Nigeria and South Africa hinders strong rebound, as growth is seen below past trends in 2019.The IMF is perturbed that most countries now borrow from local banks, which could destabilize the domestic financial sector and fuel inflation.
Countries have therefore, been advised to diversify from oil, implement fiscal reforms to stimulate growth and attract private investment to help maintain growth.