Nigeria must embark on a comprehensive tax reform to “sustainably increase its non-oil revenue” considered to be among the lowest in ratios to GDP in the world, the International Monetary Fund (IMF) has said. The nation has important development needs “big time” and with its non-oil revenue to GDP at around 3.4 and total tax revenue to GDP around eight per cent, Nigeria will not be able to effect such developments without tax reforms, noted IMF Assistant Director, Fiscal Affairs Department, Cathy Pattillo.
During a press briefing on fiscal monitor at the ongoing Spring Meetings of the Brenton Woods institutions in Washington on Wednesday, Pattillo added that there is an emphasis also on improving excise taxes. Noting that Nigeria has taken some steps in the direction of improving the excise taxes, Pattillo said that excise tax coverage should be expanded to cover “other goods and also higher rates on excises” as well as embark on “aggressive streamlining of tax incentives and exemptions.” This is as the Managing Director of IMF, Christine Lagarde, said that low income countries will have to spend $500bn in 2030 to deliver on five out of the 17 Sustainable Development Goals (SDGs) and the figure will be $2trn if emerging economies are included. The low income countries, however, she said “leave on the table over $200bn of tax that they should legitimately collect” due to practices they should have avoided “if they actually want to invest in hospitals, schools and roads.” “It means it will not be a domestic efforts but one that will require partnership and involvement of donor countries and all of us working together,” Lagarde said. Senator Olanrewaju Tejuoso, however, told National Wire on the sidelines of the Spring Meetings that Nigerians do not need any further burden more than they already have and that Nigerians have to “localize our problems,” insisting that Nigerians fix the infrastructure themselves. “We don’t need to increase the tax burden of the people as we are struggling to give them the infrastructure they need. People fix the infrastructure by themselves and you say you should tax them again. They are the ones who own their countries, let them keep on talking,” said the Ogun Central Senatorial District Senator, referring to the IMF/World Bank panelists.
Source: National wire