Over 100 million Nigerians don’t Pay Tax as Government Laments Low Tax Revenue compare to other Countries
- Nigeria could be facing a fiscal crisis if it doesn't improve its ability to collect taxes, the FIRS has warned
- Government oil revenues in recent years have been dropping making non-oil revenue even more essential
- However, many Nigerians are still reluctant to pay taxes because of concerns the money raised may be siphoned off
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Muhammad Nami, Chairman of the Federal Inland Revenue Service (FIRS), has lamented that barely 41 million Nigerians pay taxes in the country.
Nami revealed this at the Public Presentation and Breakdown of the 2022 Budget in Abuja, he also shared that Nigeria earned less than most African countries on Personal Income Tax (PIT) despite being home for the richest and affluent in the continent.
FIRS boss said:
"When you compare Nigeria tax level to that of South Africa, which has a total population of around 60 million people but only 4 million taxpayers, the total PIT paid in South Africa last year was about N13 trillion.
The number of billionaires in Lagos alone exceeds the whole number of billionaires in South Africa, yet the amount of PIT generated from Lagos was very little"
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“So if we don’t pay these taxes, there is no way the government will be able to provide the social amenities and critical infrastructure required for the wellbeing of the country.
It is sad people are not willing to pay even when they are appointed as the agent of collection, whatever they have collected they find it difficult to remit. He also lamented that many Nigerians are unwilling to pay their tax because they see Nigeria as a rich country.
"I don’t think the opnion many Nigerians have about the coountry is correct. We only have the potential to be rich, because we have a very huge population of about 200 million.
"In Saudi Arabia another oil rich country with a population of 10 million people, the VAT rate is as high as 15 percent but here in Nigeria is just 7.5 percent. I think Nigerians should begin to really consider tax payment as a call of duty to their country."
Also lending her voice, the Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, appealed to citizens to always pay their taxes.
“The money from taxes will go a long way by providing social amenities, among others. The government remains mindful of the need to provide safety nets to cushion the impact of reform measures on the vulnerable segments of the population.”
VAT Dispute: Court Gives Verdict on Important Request Made by Lagos
Meanwhile, the legal battle between the FIRS and the state governments has continued to generate more reactions in the country.
Recently, the appeal court has decided to weigh in on the matter by granting the Lagos state government the request to join the suit
The FIRS had filed an appeal at the appellate court to challenge the collection of Value Added Tax by states.