IMF Wants Federal Government to Increase Tax Paid by Nigerian Companies

IMF Wants Federal Government to Increase Tax Paid by Nigerian Companies

  • Nigerian companies might pay more taxes if the government follow the advice of the International Monetary Fund
  • The government, including other African countries, have been told to depend on the private sector in order to increase liquidity for economic growth
  • IMF said the private sector will play a crucial role in the growth of African economy which was negatively impacted by the COVID-19 outbreak last year

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Nigeria and other African countries have been told by the International Monetary Fund (IMF) to increase taxes on the private sector, as high public debt affect government intervention.

IMF said the private sector will play a key role in the recovery of Africa's economy which was affected by the COVID-19 pandemic in 2020 and is still experiencing an aftermath shock.

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Private sector is solution to finance problem

With high public debt blocking international aid, the international financial institution said Nigeria and its counterparts will have to squeeze the funds from companies.

IMF made this known in the report titled, "How to Attract Private Finance to Africa’s Development". It said the private sector should be used to grow the economies in the sub-Saharan continent.

IMF said in the statement:

"The private sector will have to play more of a role in economic development if countries are to enjoy a strong recovery and avoid economic stagnation."
Nigerian government and other African leaders have been advised by IMF to increase tax of private sectors.
Muhammadu Buhari is the President of Nigeria, the country with the largest economy in Africa. Photo: Muhammadu Buhari
Source: Facebook

Where finance should be focused on?

The creditor added:

"Infrastructure—both physical (roads, electricity) and social (health, education)—is one area where the private sector could be more involved. Africa’s infrastructure development needs are huge--in the order of 20 percent of GDP on average by the end of the decade.
"How can this be financed? All else equal, the main source of financing would be more tax revenue collections, something which most countries are working towards."

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The global fund further stated that African countries need to also create new funding source from the international community and the private sector.

Meanwhile, Legit.ng had previously reported that United States footballer, Russell Okung, advised President Muhammadu Buhari to support bitcoin investment.

Okung said bitcoin will be a game-changer for the country's economy which has been affected by the COVID-19 pandemic.

He said now is the best time to allow the country to trade bitcoin, as the current generation is leading the way. Okung mentioned some countries already using cryptocurrency as an advantage.

Source: Legit

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