See The Group of Persons Nigerian Government Wants To Aim At To Grow Tax Revenues

See The Group of Persons Nigerian Government Wants To Aim At To Grow Tax Revenues

The Nigerian government is poised to reevaluate tax rates for high-income individuals, aiming to establish a more equitable system that safeguards the interests of the less privileged while concurrently boosting the country’s revenue.

This initiative also seeks to combat the prevalent issue of tax evasion in an economy where tax collections relative to GDP are among the lowest worldwide.

Additionally, there is a proposal to reduce the current corporate income tax rate of 40 percent and introduce a tax amnesty program to incentivize evaders to settle outstanding dues.

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The objective of these fiscal reforms is to elevate Africa’s largest economy’s tax-to-GDP ratio to 18 percent by 2026, an increase from the current 10.9 percent. This information was reported by Taiwo Oyedele, the head of the Presidential Committee on Fiscal Policy and Tax Reforms, as cited by Bloomberg.

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Oyedele stated, “We will devise structures and systems for determining which taxes can be imposed, how they will be collected, who is authorized to collect them, and how they should be accounted for.” This move is part of the government’s endeavor to rectify Nigeria’s reputation for excessive taxation.

Mr. Oyedele affirmed that nearly 70 different taxes are levied in Nigeria, with the goal being to streamline them to single digits. “We have identified the top eight, which account for 99 percent of tax revenue, and we will retain these while eliminating the rest,” he explained.

As Africa’s largest oil producer, Nigeria is striving to diversify and increase revenue streams following prolonged oil theft, which has deprived the country of the benefits of the current oil boom. With a debt-to-revenue ratio of 96.3 percent, President Bola Tinubu has limited borrowing capacity to finance the government’s expenditure plan, underscoring the urgency of overhauling the tax structure to enhance earnings.

According to data provided by Mr. Oyedele, fewer than one in every 16 companies in Nigeria actively fulfills their tax obligations. He emphasized, “If people are aware that the government has knowledge of their income and whereabouts, and if they have not been meeting their tax obligations, they are likely to come forward if we declare an amnesty.”

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