- PwC: there are 60 official taxes, 200 others
If the Federal Government ends the reign of waivers, impunity by the Ministries, Department and Agencies (MDAs), instutionalise efficient tax collection system and other reforms in the fiscal environment, it can raise revenue generation to the Federation Account to N40 trillion.
Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, who spoke at a forum entitled: “Fiscal Options and Post-Election Governance” organised by BudgIT to chart ways out of the constrained fiscal environment for President Bola Tinubu’s administration, described the country as poor with many poor people.
He said the country could raise the N40trillion from theValue Added Tax (VAT), customs and excise, and property tax, if properly administered.
Comparing Nigeria with South Africa and Kenya, Oyedele said while the former collected N190trillion rand between 2021 and 2022, out of which he said 24trillion rand was income tax, Kenya collected an equivalent of N8trillion with its population of only 53 million, adding that the nation must optimise her resources.
He said Saudi Aramco generated $160bilion while the Nigerian National Petroleum Corporation Limited(NNPCL), on account of its inefficiency, says the Federal Government even owed it.
He advised the Federal Government to stop bleeding and plug the leakages as typified by fuel subsidy, end unproductive waivers and foreign exchange distortions, adding that there a lot of wasteful intervention in the system which the Federal Government must stop.
Similarly, he decried the high cost of tax collection, which is fuelling corruption and address the leadership challenge. He cited the National Assembly, Economic and Financial Crimes Commission (EFCC) and MDAs alleged by the Auditor-General of the Federation report of defaulting in tax payment.
He also stressed the need to harmonise the taxes in the country which he said are officially 60 and unofficially 200. According to Oyedele, the Manufacturers Association of Nigeria (MAN), Rivers State chapter, pays 197 different taxes.
He lamented that because of the broken social contract, there is low morale by people to pay tax, stressing that only 17 per cent believe in paying tax is right while 83 per cent doesn’t believe so.
He cited the Nordic Region consisting of Denmark, Norway, Sweden, Finland, and Iceland, as well as the Faroe Islands, and others pay high taxes while their governments spend more on their people, adding that it is the reason why the people are happy and their inequality is one of the lowest in the world. He said tax was not the problem by the value.
According to him, the fiscal and tax space of the country is ill, adding that low tax to gross domestic product (GDP) ratio, high borrowing costs informal tax collection by non-state actors and others are symptomatic of the ills affecting fiscal and tax system. He cited the collection of ‘taxes’ by road transport workers popularly called agberos in Yoruba parlance estimated at about N1billion yearly without anything to show for the collection as an example of the sickness in the tax structure.
He decried not only multiple taxes and earmarked levies but the existence of multiple collection agencies and blamed filing gap, under reporting and underpayment of taxes for the low tax revenue and urged the Federal Government to do away with tax ID system and use the National Identity Number (NIN) for individuals and Corporate Affairs Commission (CAC) registration for corporate organisations.
He also advised the government to review the national tax policy without necessarily overtaxing the people, change the tax culture and renew the social contract with the people.
He also insisted that politicians must pay tax before supretending over the national resources, adding that the Federal Government must also prioritise what the available scarce cash will be spent on.