Nigeria’s tax revenue low due to distrust in system-NESG

Joy Obakeye

The Nigeria Economic Summit Group (NESG) has said that more than 81 per cent of taxable adults and businesses in Nigeria do not pay their income taxes regularly due to distrust in government.

The group lamented that according to figures available, the 20 million registered taxpayers, compared to the country’s population of nearly 200 million people, shows that revenue from tax remains low; affecting the country’s tax morale as well as duplication of taxes in Nigeria.

The highlights were revealed in a presentation made by NESGs Research Director, Fiscal Policy Roundtable, Mr Tayo Oyedele, at the Nigeria Governors’ Forum Secretariat.

Oyedele, who was in the company of the Chairman of the Fiscal Policy Roundtable (FPR), Dr Sarah Alade, had paid a courtesy call on the Director-General of the Nigeria Governors’ Forum, Mr Asishana Bayo Okauru, to solicit for the opportunity to expose the ‘sour tax narrative’ to the governors and seek their involvement to correct the ills that are denying the country of its collectable revenues.

The Director of Research, who condemned the seeming national apathy of Nigerians on payment of taxes said the figures seem paltry, While explaining the concept and reasons adduced to the country’s low tax morale, the NESG disclosed however that nearly 85 per cent of those who deem it unnecessary to pay taxes to the government willingly pay same to “non-government actors.”

The NESG attributed this “ironic twist to the distrust that pervades the environment when it comes to paying taxes, dues and levies to a government that does not command the public’ trust.”

Of the tiers of the government on whose shoulders tax collection is reposed, the research showed that local governments and their officials are among the most untrustworthy, followed by the state governments and the tax officials themselves.

Many believe that it is unwise to pay taxes to entities that do not translate taxes to services, or to officials who divert same to personal use,” Oyedele divulged, insisting that there were nonetheless 17 per cent of the population who sees the payment of taxes as a civic duty which all must perform.

Maintaining that there were 354 taxes in Nigeria, which create duplicity of taxes and favouritism on where to audit and where not to audit, not minding the unprofessional conduct of tax collectors, who sometimes threaten the public, the Group also regretted that the penalties for non-payment of taxes in Nigeria are not the only kind and not punitive enough, but that the processes of penalising reluctant taxpayers were selective.

The NESG, therefore, recommended that it would have been better if the country minimised its tax regimes from 354 to only 10, abrogating such meaningless taxes as the ozone layer tax which the population can hardly fathom.

According to the research as narrated by the NESG, personal income taxpayers would have been happier to pay their taxes if education, health, and infrastructural provision were raised to global standards, while corporate taxpayers would love to see electricity, roads and security improved.