|Kemi Adeosun is a new entry this year|
Kemi Adeosun has been the finance minister of Nigeria since November 11 2015. Her work in improving Nigeria's economy has focused on looking towards alternative economic activity to boost government revenue. With oil accounting for 70% of government revenue in Nigeria, but only 13% of the economy, Adeosun has focused her time in office on reviewing tax policy to effectively harness the much-needed resources for sustainable economic growth and development.
Raising non-oil revenue has been her priority, especially in light of the slump in oil prices. As Adeosun drills down to the details, she tells the government to forget about oil, particularly because the fluctuating price has affected revenue collection. Adeosun told the Financial Times that a number of federal agencies had habitually under-reported their revenues. "Because of oil, we ignored everything else," said Adeosun. She is working on strengthening Nigeria's tax policies to evolve the country's tax system to support its shifting fiscal structure.
However, her appointment to office wasn't always believed to be beneficial to the economy. The business community criticised her appointment to office because she was seen as "poorly qualified for the job". Her career in taxation had taken her from being a senior manager at PwC in London to a managing director at Chapel Hill Denham Management – unusually junior positions for a person then thrusted into a top government job.
Adeosun began her government career as the commissioner of finance in the Ogun State in 2011. She was described by the Economist as an "accountant who cleaned up the books of one of Nigeria's smaller states" in November 2015, but less than a year later the same publication called her the "tenacious" finance minister that is helping Nigeria get control of its earnings.
Adeosun has had her work cut out for her. Nigeria has one of the lowest tax-to-GDP ratios in the world at just 5%, necessitating an overhaul of its tax policy. On August 10, Adeosun spoke to the inauguration committee about the National Tax Policy document, which was introduced in 2012. The committee was tasked with reviewing the National Tax Policy, recommending a list of tax laws and regulations, suggesting an effective implementation process for the law, and reviewing existing double taxation agreements. Other work tasked to the committee included ensuring inter-agency cooperation between the Federal Inland Revenue Service (FIRS) and other revenue agencies to enhance the government's internally generated revenue, and expanding Nigeria's treaty network to include major trading partners. "Government shall indeed remain committed to the continuous improvement of our tax system as part of a dynamic framework to enhance compliance," Adeosun said.
In its latest health check of the Nigerian economy, the IMF recommended that Nigeria raise its VAT from 5% to 7.5%, to broaden its tax base and to strengthen its tax administration in order to fill the revenue gap left by oil. Adeosun is also encouraging the government to implement technology-driven tax reforms to improve efficiency in tax collection. In an article written by Adeosun, she said that Nigeria's tax system is moving in a fresh direction.
"Infrastructural projects such as rail and roads create jobs, generate taxes and stimulate further spending. This is the economic multiplier effect that capital spending brings," Adeosun said. "Therefore, while an increase in public spending may create a deficit in the short term, the resultant increase in productivity will lead to a higher rate of economic growth and greater tax revenues."
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