More than 30 million Nigerians who generate taxable income do not pay tax, which compounds the government’s efforts to expand its income, lamented the Director General of the Budget Office (DG), Dr Ben Akabueze.
Speaking at an interactive forum with media and civil society organizations in Abuja over the weekend, he also said it was not viable for the government to cut recurrent spending.
Akabueze said that out of about 70 million active Nigerians, only about 41 million are subject to tax.
He also regretted that Nigerians do not pay property tax, while noting that the discussion about it is uncomfortable as even policymakers own property.
He said: “Today if you take the demographics of Nigeria, there are around 70 million people in the labor force and even if you just talk about the unemployment rate, there are around 70 million Nigerians who generate taxable income and should contribute to pool tax no matter how much.
“But the total number of Nigerians in the tax pool according to the Joint Tax Board file is around 41 million. So, there are around 30 million Nigerians who are not paying their fair share.
“And due to the blatant informality of our economy, it is difficult… and in the absence of a unique identifier for Nigerians, we must now try to solve this problem.
“But you see, it’s difficult. And there are a lot of people, anonymous people who make tons of money in this economy, who don’t pay taxes.
“So how do you get these people to pay their fair share? We have properties everywhere. Some of the people who own these properties do not pay tax. And yet, this country does not really have a national property tax system.
“Even in a few states that have property taxes, enforcement and enforcement is a problem.
“It comes down to this thing that we don’t all want to have this awkward discussion because even the decision makers are owners. People don’t want to talk about it. Someone has to push anything.
The CEO said that in some economies much larger than Nigeria, up to 65% of their budgets are funded by property taxes, saying, “So we cannot run away from the fact that we all have to pay. “
Akabueze noted that the federal government cannot cut recurrent spending in line with calls from some quarters, saying taking such steps would not amount to a significant reduction in the budget deficit.
He said that what is more viable is to fix the revenues to make more money available to the government.
The CEO also defended current federal government borrowing, noting that reducing borrowing will mean the government will spend less.
While insisting that federal government borrowing is within sustainable limits, he said the federal government is rich in assets and will sell if necessary to pay off debts.