The Federal Government is planning to increase the tax ratio to the Gross Domestic Product to 15 percent from eight percent.
The Minister of Finance, Zainab Ahmed, disclosed this in Abuja Tuesday at the 25th annual conference of the Chartered Institute of Taxation of Nigeria (CITN), with the theme ‘Nigeria of the Future: Achieving Sustainable Development through Taxation’.
The minister, represented by Basheer Abdulkadir, Director, Tax Policy, Ministry of Finance, Budget and National Planning, said a lots of levies and taxes collected by the sub-national level had not been taken into account in calculating the tax to GDP ratio.
She said, “And as part of the integrated national financing framework. We’re also looking at increasing the revenue to GDP ratio to 15%.”
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She cited a report of an independent study that tax ratio to GDP had gone up to 10 percent “even though the result has not been put out in the public domain.”
“But you know when you’re calculating tax to GDP ratio, you’ll have to take all the taxes put for the federal and subnational levels. The 7% that has always been tinkered on is only the federal taxes,” she added.
Earlier, CITN President, Adesina Adedayo, said, “In the midst of insufficient revenue from crude oil earnings, fluctuating value of the Naira, rising debt burdens and increasing government’s expenditure, taxation has become the only hope of the nation.”
Nigeria Country Representative, United Nations Development Programme (UNDP), Mohamed Yahya, said “Taxation is inextricably linked to development because it provides the revenue that states require to mobilize resources and strengthen a country’s infrastructure.
“Domestic revenue collection is crucial if governments are to provide critical services like water, energy, education and other basic infrastructure. It is not a matter of simply taxing more or lowering corporate taxes.”
“Rather it involves taxing belter by simplifying and improving tax administration, bringing tax laws up to date, using taxation instruments to facilitate production and ensuring tax administrators understand how to audit both domestic and multinational corporations.”