8th October, 2021
Muhammad Nami, the Chairman of the Federal Inland Revenue Service (FIRS), has said that only 41 million people pay taxes in Nigeria out of the over 200 million in the country.
Nami made the disclosure at the ‘Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill’ in Abuja on Friday.
He said that in spite of the 41 million tax payers in the country, Nigeria still earned lower than what its counterparts across Africa generates from Personal Income Taxes (PIT).
“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 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 said that the total collection up to Sept. 31 which has not been fully reconciled with the Central Bank of Nigeria (CBN) and the Nigerian Customs is about N4.2 trillion. From this amount, oil related taxes accounted for only 22 per cent which is N950 billion only, the non oil taxes generated was within that period is N3.3 trillion.
“People are not willing to pay even when they are appointed as agent 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.
“If you look at it from the rate of taxes paid in Saudi Arabia with a population of 10 million people, the VAT rate is as high as 15 per cent and what we have in Nigeria is just 7.5 per cent,” Nami said.
He also said that Nigeria, an oil-producing country, could not be compared to a small country like Saudi Arabia, saying “we are still not there.”
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, urged citizens to always pay their taxes.
“The money from taxes will go a long way, by providing social amenities, among others.”
Ahmed said that efforts aimed at addressing revenue leakages include dimensioning cost of tax waivers and promoting policy dialogue and transparency around tax waiver regimes.
She also said that achieving government budget objectives requires bold, decisive and urgent actions.
“The government remains mindful of the need to provide safety nets to cushion the impact of reform measures on the vulnerable segments of the population.”