The Federal Inland Revenue Service (FIRS) disclosed that only 41 million Nigerians pay taxes in Africa’s most populous economy with an estimated 200 million people.
This was disclosed by Muhammad Nami, the Chairman of the Federal Inland Revenue Service (FIRS), at the ‘Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill’ in Abuja on Friday.
Nami warned that Nigeria earns taxes below most of its African counterparts, especially in the areas of Personal income Taxes.
He said:
“If you also compare that with South Africa where they have a total population of about 60 million people, with just 4 million taxpayers, the total personal income tax paid in South Africa last year was about N13 trillion. You can now see that these things are not adding up.
The number of billionaires in Lagos alone are more than the number of billionaires in the whole of South Africa but yet what we generated as PIT by Lagos State was low.
So if we don’t pay these taxes, there is no way the government will be able to provide the social amenities required, the critical infrastructure required for the wellbeing of the country,” Nami said.
He added that tax collection as at September 31, was yet to be fully reconciled with the Central Bank of Nigeria (CBN), citing that oil-related taxes accounted for only 22% which is N950 billion only, while the non-oil taxes generated within that period was N3.3 trillion.
“People are not willing to pay and even when they are appointed as agents of collection, whatever they have collected they find it difficult to remit.
We assume that we are a rich country, I don’t think that is correct, we only have the potential to be rich, because we have a very huge population of about 200 million,” he said.
He added that compared to the rate of taxes paid in Saudi Arabia with a population of 10 million people, the VAT rate is as high as 15 percent and what we have in Nigeria is just 7.5 percent, adding that Nigeria, an oil-producing country, could not be compared to a small country like Saudi Arabia.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, stated that the money from taxes will go a long way, by providing social amenities, among others, she added that the FG is making efforts at addressing revenue leakages include dimensioning cost of tax waivers and promoting policy dialogue and transparency around tax waiver regimes
