The Federal Inland Revenue Service (FIRS) has revealed that only 41 million Nigerians pay taxes in Africa’s most populous economy with around 200 million people.
This was revealed by Muhammad Nami, the chairman of the Federal Inland Revenue Service (FIRS), during the “Public presentation and distribution of the highlights of the appropriation bill 2022” in Abuja on Friday.
Nami warned that Nigeria collects lower taxes than most of its African counterparts, especially in the areas of personal income tax.
What the FIRS boss said
“If you also compare that with South Africa where they have a total population of around 60 million people, with just 4 million taxpayers, the total income tax paid in South Africa last year was of about 13 trillion naira. You can now see that these things do not add up.
“The number of billionaires in Lagos alone is greater than the number of billionaires in South Africa as a whole, yet what we generated as PIT by Lagos State was small.
“So, if we do not pay these taxes, the government will in no case be able to provide the necessary social equipment, the essential infrastructures necessary for the well-being of the country”, Nami said.
He added that the tax collection as of September 31 had not yet been fully reconciled with the Central Bank of Nigeria (CBN), citing that oil-related taxes were only 22%, or just 950 billion naira, while that non-oil taxes generated during this period, 3.3 trillion naira.
“People are not ready to pay and even when they are appointed collectors, everything they have collected, they have a hard time handing it over.
“We assume that we are a rich country, I don’t think this is correct, we only have the potential to be rich, because we have a very large population of around 200 million”, he said.
He added that compared to the tax rate paid in Saudi Arabia with a population of 10 million, the VAT rate is 15 percent and what we have in Nigeria is only 7.5 percent. , adding that Nigeria, an oil producing country, could not be compared to a small country like Saudi Arabia.
Minister of Finance, Budget and National Planning Ms Zainab Ahmed said tax money will go a long way, providing social amenities, among others, she added that the FG is making efforts to remedy to revenue leakage, in particular by sizing the cost of tax exemptions and promoting political dialogue and transparency around tax exemption regimes.