‘Nigeria Can Generate N29tr Extra Revenue in Post-COVID-19 Era’
Nigeria can generate N29 trillion extra revenue if the Federal Government of Nigeria do the right thing by amending the tax laws to streamline the number of taxes collectible by the three tiers of governments; drive long term Foreign Direct Investment by providing incentive to foreign investors; utilise the policy landscape to support the private sector and enforce population; provide regular education and sensitisation to the citizens to improve the level of understanding and by implication and compliance.
This was the submission of Sir Gbenga Badejo in his paper titled “Taxation: A Veritable Tool For Revenue Generation In The Post Covid-19 Era” delivered as the Chairman of the Investiture of the Pioneer Chairman of Chartered Institute of Taxation of Nigeria (CITN) Mowe/Arepo District Society Mr. Akin Akindele recently.
In his address, Sir Badejo who is also a fellow of the Chartered Institute of Taxation of Nigeria (CITN) noted that the Kaduna State Internal Revenue Service increased its Internally Generated Revenue (IGR) from tax by 200% just by using technology to collect its taxes adding that private sector innovativeness and talent should be fostered in ways that creates new opportunities for young people.
He however on a sad note, revealed that data from the World Bank Poverty and Shared Prosperity report shows that Nigeria’s poverty level has further increased in the wake of the COVID-19 pandemic noting more specifically that 79 million Nigerians live in extreme poverty, accounting for 20 percent of the people living in poverty in Sub-Saharan Africa.
According to the investiture chairman and Managing Partner, Chief Executive Officer GBC Professional Services, the COVID-19 pandemic and its associated economic crisis are enabling factors of the high poverty headcount adding that data from World Bank survey in Nigeria suggests that about 85 percent of households experienced higher food prices, with half reducing their food consumption as a coping strategy.
Sir Badejo said the upward trend in poverty is expected to continue owing to the difficulty in generating adequate broad-based economic growth, inability to create jobs and high population growth rate. The Taxation expert stated that in the year 2020, the country’s N2.64 trillion oil revenue target declined by 40 per cent as a result of twin shocks of COVID-19 and low crude oil price. By April 2020, the price of oil he added dropped by 80% to about US$5 and before the outbreak of the virus, Nigeria’s unemployment rate was at 23.1%, while underemployment data was at 16%, according to a 2018 report by the National Bureau of Statistics.
He wondered why in the first or second quarter of last year, 99.2 per cent of government revenue was spent in debt servicing noting that “if we can raise our revenue to about 15 to 20 per cent of GDP, our debt would be very small because, by debt to GDP, we have one of the lowest in the world”.
Sir Gbenga Badejo revealed that two factors responsible for Nigeria’s economic problem are low revenue and high rate of borrowing insisting also that the challenges of digitizing filing of returns regularly – VAT, Income Tax, WHT, current inefficiency of the FIRS’s Tax Pro Max web portal, remittance of tax and difficulty in processing tax refunds and utilization of tax refund by tax payers have not helped the country maximize it’s full tax potentials in spite of its huge population.