The Vice President, Prof. Yemi Osinbajo, on Tuesday, declared that Nigeria’s eight per cent tax-to-Gross Domestic Product ratio was among the lowest globally and that efforts were on to increase this figure.
He also stated that the Federal Inland Revenue Service exceeded its tax collection target last year, as it was able to collect N6.405tn from taxpayers nationwide.
Osinbajo spoke at the public lecture organised by the Chartered Institute of Taxation of Nigeria in Abuja to commemorate the institute’s 40th anniversary.
“Today, lessons from countries that are dependent solely on revenue from oil have proven to be quite instructive,” the Vice President, who was represented by the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, Aliyu Ahmed, said.
He added, “Nigeria’s tax-to-GDP ratio is still one of the lowest in the world, at about eight per cent, while our contemporaries are in the neighbourhood of 16 to 25 per cent, even in Africa. We can surely do better.”
He said tax was an important fiscal tool that could be described as a more sustainable means of achieving national development.
“This is especially since we know that oil which was and is our mainstay is a dwindling resource and because the rest of the world is moving away from fossil fuel,” Osinbajo stated.
He said the government’s objective of widening the tax base was to ensure improved revenue collection through voluntary compliance in line with international best practice.
He said, “We are happy with the results of sustained efforts towards enhancing tax compliance despite the global economic challenges occasioned by COVID-19 as well as the disruption of business activities in 2020 by the nationwide protests.
“None the less, tax administration has made significant improvement in collections as the Federal Inland Revenue Service was able to exceed its collection target for the year 2021 with a record collection of N6.105tn in both oil and non-oil revenue.
“This was achieved through strategic, administrative and operational reforms, shared hard work and political will, as well as the support to the FIRS, among other relevant revenue collection agencies.”
Osinbajo, however, noted that revenue generation challenge remained the major fiscal constraint of the Federal Government.
“In this regard, government remains committed to the implementation of the strategic revenue growth initiative,” he stated.
The Vice President added, “A robust tax system is a prerequisite for an economy that is desirous and genuinely committed to growth and development.”
The President, CITN, Adesina Adedayo, said the institute was adding value to national development in regulating the tax profession and bringing taxation issues to the front burner.
“Therefore, we consider it worthwhile to reflect over the past years, celebrate what we have achieved, take cognisance of our shortcomings and to continuously reposition the institute for the next level of greatness,” he stated.
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