Tax reforms: Increase tax on the rich, don tells FG

Prof. Kabiru Dandago, a Professor of Accounting at the Bayero University Kano, has called on the federal government to increase taxes on wealthy Nigerians rather than raising Value Added Tax (VAT).

Speaking on Trust TV’s Politics Today on Sunday, he urged the government to introduce property taxes, luxury goods taxes, and transactional taxes to generate revenue, potentially doubling the amount currently generated from VAT.

Dandago said, “I don’t support VAT and I have proposed its scrap. The government can instead look for money in transactional tax, luxury asset tax, and property tax. These three can give you two times what you are accepting from VAT.”

He said these new taxes would help narrow the wealth gap, as the rich would bear a larger burden. For example, taxes on luxury transactions could target high-income individuals.

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“When you enter into any luxurious transaction, if they are rich, you can develop a threshold that you spend more than N10 million on some luxurious activities,” he said.

Dandago also expressed concern over the introduction of a family income tax in the reform bills, which he fears might be an attempt to tax inheritance.

He said, “When I was reading the bill, particularly the Nigerian tax bill, I came across the term ‘family income’ and some reference to culture and any other law in the country. They are saying that income too is taxable.”

He cautioned that this could lead to taxing inherited wealth or gifts, akin to capital transfer taxes.

On the political front, Baba Yusuf, a policy strategist and economic expert, suggested that the opposition from northern governors to the bill may be driven by self-interest rather than concern for the people.

He pointed out that their silence during the fuel subsidy removal, which increased their FAAC allocations, indicated that their opposition to the tax bill may not be motivated by the welfare of the masses.

Nurudeen HammanYero, an entrepreneur and politician, called for the suspension of the tax bills, urging the government to first allow Nigerians to benefit from the fuel subsidy removal and forex improvements before introducing new taxes.