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Opinion: Nigeria Missing Opportunities To Benefit From A Proper Tax System

Opinion: Nigeria Missing Opportunities To Benefit From A Proper Tax System

Nigerian Finance Minister Ngozi Okonjo-Iweala. Photo by Bloomberg.
Nigerian Finance Minister Ngozi Okonjo-Iweala. Photo by Bloomberg.

Moreover, the Nigeria Police Force and the Federal Road Safety Corps should not charge the same amount of CMR and roadworthiness for a 2001 Hyundai and a 2014 Hyundai. Oh! This is a self-exploitation. The Nigerian authorities should wise up. A billionaire driving a car worth N20m is obviously able to pay N200, 000 for the registration. After all, the rich and the poor never get equal treatment in Nigeria.

Deliberalization of tax system

I call on the Nigerian government to deliberalize our tax system. Nigeria is too liberal with multinational corporations and foreign companies. We allow these conglomerates to evade taxes enticing them to invest in our economy so that the unemployed youths could get a job. These expatriates bribe our government officials to get tax waiver. They pay less than 20% of what is due for Nigerians.

Apart from evading taxes, multinational corporations in Nigeria have denationalized their promotion and recruitment policies. Instead of providing Nigerians with jobs, these tax evaders practice employment casualisation. Unfortunately, these aberrations happen under the watchful eyes of the obviously oiled Nigeria Labour Congress and Nigeria Trade Union Congress.

Corruption

Another quagmire waging war with the Nigerian tax system is corruption. Tax collecting agencies are too corrupted, insincere and unfaithful to the Nigerian people. No doubt Nigeria would have achieved more in terms of infrastructure and employment if 60% of what is due to the three tiers of government is remitted by the tax collecting agencies.

Today Lagos and Ogun states have proven the cure for the Nigeria developmental challenges lays in the effectiveness of its tax system. For instance, under the administration of Governor Bola Tinubu (1999-2007) the internally generated revenue of Lagos state was between N800m to N2.7bn.

Nonetheless, when a former governor of Lagos state, Tunde Fashola assumed office in 2007 he created a ministry of budget and economic planning saddled with responsibility of reforming the state tax system. Just as it was predicted, the monthly IGR of Lagos state increased from N2.7bn to N18bn within two years, and by 2015 Lagos state was already generating N32bn.

In Ogun state Governor Ibikunle Amosun inherited a monthly IGR of N600million from his predecessor. Today Ogun state is generating N7bn per month. What Fashola and Amosun did was leakages blocking and ensuring there was accountability in the system. Today Lagos and Ogun states are solvent enough to deliver dividends of democracy to their people with an amazing ease without the statutory allocations from the federal government.

Central and state governments of Nigeria should act now!

This opinion piece was first published by Naij.com