NGO calls for overhaul of Nigerian tax system

ActionAid has called for an overhaul of the country’s tax system to provide the funding needed to ensure that every child in Nigeria gets the opportunity to go to school.

The demand is based on a new Actionaid report released on Thursday, titled “Scaling-up Domestic Resources for Financing SDG Four: A Taxing Business?”

The report said developing countries would never get the money they need for education when tax revenues remained so low, thereby keeping them in a perpetual cycle of poverty.

Mr Adriano Campolina, Secretary General, ActionAid International, said that getting adequate education funding was directly linked to tax justice.

“Developing countries are giving away 138 billion dollars every year in what the IMF calls harmful tax incentives.

“If 20 per cent of that lost revenue was spent on education, we could make actual progress in getting every child into school.

“Financing from aid plays a role but it is too short term and unpredictable to finance quality public services like education,” he said.

Also, Mrs Funmilayo Oyefusi, Interim Country-Director, ActionAid Nigeria, said that tax evasion by companies operating in Nigeria had a direct impact on education.

“Take Nigeria’s scenario; a country with over 10.5 million children not in school, according to UNICEF, yet the country gives over N500 billion a year away in tax breaks.

“Fifty per cent of that amount would be more than enough to give every one of those children an education and would enable the government of Nigeria to employ 100,000 more teachers,” she said.

Oyefusi also called on all big businesses with intention to contribute to education to pay their fair share of tax in each country in which they operate.

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The Education Tax Act in Nigeria gives a picture of how the government would have a sustainable education system funded through tax.

The tax imposed by the act on companies operating in the country was meant to fund federal, states and local government educational institutions, including primary and secondary schools.

“Two per cent shall be charged on the assessable profit of a company registered in Nigeria.

“The Federal Board of Inland Revenue shall assess and collect from a company the tax imposed by this act.

“Accordingly, the higher education section shall receive 50 per cent, the primary education section 30 per cent; and the secondary education section shall receive 20 per cent of the total tax collected in any one year,” the act says.

This means that the number of companies the government succeeds in taxing determines the amount of money put into the country’s education system.

In December 2017, the Minister of Finance, Mrs Kemi Adeosun, revealed that more than 800,000 companies in Nigeria, including government contractors, never paid any tax.