With an estimated population of 200 million, the Federal Inland Revenue Service (FIRS) revealed that just 41 million Nigerians pay taxes.
At the ‘Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill,’ held on Friday in Abuja, FIRS Chairman Muhammad Nami revealed this.
When it comes to Personal Income Taxes, Nigeria earns less revenue than most of its African peers, and this should be taken seriously.
The FIRS boss 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 thqat is correct, we only have the potential to be rich, because we have a very huge population of about 200 million,” he said.
According to him, in Saudi Arabia, where the population is 10 million, the VAT rate is 15%, Nigeria’s VAT rate is only 7.5%, and Nigeria, an oil-producing country, cannot be compared to a small country like Saudi Arabia. He concluded that.
Finance, Budget and National Planning minister Zainab Ahmed said that money from taxes will go a long way in providing social amenities and other services. She added that the FG is making efforts to address revenue leakages, including dimensioning the cost of tax waivers and promoting policy dialogue and transparency about tax waiver regime.