‘Nige­ria lost $8.3bn to over-in­voic­ing of im­ports’

Daily Trust - - INSIDE POLITICS - From Mo­hammed Shosanya, Lagos

Nige­ria lost over $83.3 bil­lion be­tween 1960 and 2011 through over-in­voic­ing of im­ports and un­der-in­voic­ing of ex­ports, a se­nior of­fi­cial of the African De­vel­op­ment Bank (ADB), Dr. Uos­mane Dore, said in Lagos on Satur­day.

Dr Dore, a di­rec­tor of the re­gional bank, who dis­closed this in a pa­per, “Diver­si­fy­ing Rev­enue Base of Nige­rian Econ­omy”, de­liv­ered at the 2015 In­vesti­ture of the Char­tered In­sti­tute of Bankers (CIBN), also re­vealed that 65per cent of reg­is­tered tax pay­ers in the coun­try have not filed their tax re­turns, while 30 per cent of com­pa­nies abuse their tax ex­emp­tion sta­tus.

Ac­cord­ing to him, 75 per cent of small and medium en­ter­prises (SMEs) are cur­rently not in the na­tion’s tax sys­tem.

Dore ex­pressed con­cern that Nige­ria’s tax rev­enue, at 7 per cent of the coun­try’s gross do­mes­tic prod­uct (GDP), lags be­hind the emerg­ing mar­ket av­er­age of 20 per cent.

The ADB chief quoted a study of the Fed­eral In­land Rev­enue Ser­vice (FIRS) which showed there is a po­ten­tial non-oil tax gap of $11 bil­lion that can be cap­tured.

He frowned at the con­tin­ual de­pen­dence of the coun­try on oil rev­enue and em­pha­sized the need for Nige­ria to di­ver­sify its rev­enue base in or­der to achieve rev­enue sta­bil­ity, im­prove fis­cal per­for­mance and build re­silience to risks.

He at­trib­uted fed­eral gov­ern­ment’s chal­lenge in rev­enue di­ver­si­fi­ca­tion to, apart from the crude oil dis­cov­ery, non-pub­lic con­sul­ta­tion in craft­ing pre­vi­ous poli­cies, weak phys­i­cal and so­cial in­fras­truc­ture, lim­ited ex­per­tise and ca­pac­ity in spe­cial­ized non-oil ac­tiv­i­ties such as manufacturing, ser­vices. To broaden the tax net, Dore sug­gested the need to im­prove tax fil­ing com­pli­ance by Com­pany In­come Tax and Value Added Tax pay­ers.

He also rec­om­mended the need for the coun­try to con­trol tax ex­emp­tion abuses, as well as ex­pand the tax net to po­ten­tial ad­di­tional tax pay­ers. The ca­pac­ity of the Fed­eral In­land Rev­enue Ser­vice to deal with il­licit financial flows, he added, should be im­proved. Nige­ria, he said, should con­sider rais­ing VAT to 10 per cent from its cur­rent level of 5 per cent. “Cur­rently, tax as­sign­ments/tax col­lec­tions are dom­i­nated by the fed­eral gov­ern­ment. They should be re­vised so that the tax base at the lower tiers of gov­ern­ment could be ex­panded and their de­pen­dence on al­lo­ca­tions from the Fed­er­a­tion Ac­count re­duced,” he added.

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