Beyond politicking and political divide, politicians nationwide across political lines are reaching a unified position on a particular national need. It is no other need than the need for the nation’s economic survival.
The latest to lend a voice to what the nation must do to shore up its revenue base is coming from the governor of Kaduna State, Governor Nasir El-Rufai, prescribing taxation as the way out the woods of economic crash.
The governor’s analysis hinges on the need for the government to fund its daily overhead cost and at the same time, provide basic amenities through taxation to the populace. Driving home his point, the governor pointed to the sorry ratio of the nation’s Gross Domestic Product to tax, describing it as significantly low if not the lowest in the world.
The governor’s submission on this below,
‘’Nigeria’s Tax to GDP ratio is something in the region of 6%:7%; one of the lowest in the world and it is a national disgrace, compared to countries that collect up to 20% of GDP.
‘’So, we have got to a point in this country, whether we like it or not, due to the continuous subsidy of petroleum products, most of which leaks to neigbhouring countries, NNPC cannot contribute anything significant to the federation account.
An insight from Kaduna
In comparing the nation’s low tax ratio to GDP, it is crucial to note that Kaduna State with a ₦2 trillion yearly GDP size is expected by calculation to rake in ₦400 billion as tax return but contrary to permutation according to the governor only collected a little above ₦50 billion in recent times.
The above data indicates a clear deficiency in the nation’s tax administration, it is in this light that Governor EL-Rufai charged the Chattered Institute of Taxation during its 23rd Annual Tax Conference to up the ante by supplying the technical know-how to navigate identified hurdles in the system.
The rest of the governor’s insight
‘’We are therefore having to come back to the truth, which is the only way to finance the running of government and provide social services is through taxation’’
‘’most countries are planning for a green economy in which oil will not be used at all; electric cars will be the norm. Industries will convert to solar and renewals.
‘’So, we must begin to move away from oil. Oil is neither answer nor the question that will solve our problems. The real solution to our problems is better and efficient taxation of goods and services,’’
‘’in the light of the fact that 75% of Nigeria’s economy is informal, how do we scale up the taxation of the informal sector? I think some progress has been made with Presumptive Taxation, but it is not enough.’’
‘’Agriculture accounts for a large proportion of our GDP. Here in Kaduna state, like any state in the federation, agriculture is the largest employer of labour and the largest contributor to GDP’’
‘’But it is incapable of being taxed at the farm gate. How do we tax agricultural production at the farm gate, not at the valued-added and processing stage, so that we will be able to widen and broaden our tax net as well as proceeds?’’
‘’the big elephant in the room is how do we tax these global tech companies, that make a lot of money in our country without being physically present here, for you to even tax them?”
‘’scale up Tax Identification records so that we capture every adult in Nigeria for taxation.’’
‘’A Development Levy of ₦1,000 that is supposed to be paid by every adult. We believe that this nominal payment will make people ask the government to account for their tax revenues.’’
‘’Today, what governments do in Nigeria is to collect proceeds from oil revenues and that has led to a sleepy citizenry that does not ask questions about what we do as governments with the tax payers’ money,’’