Financial experts have lamented the country’s tax to GDP ratio, describing it as one of the poorest in Africa. The figure, which stands at just 6 per cent is significantly lower than Ghana and Egypt at 16 percent, Morocco at 22 percent and South Africa at 27 percent.
This was revealed at the tax conference, themed, Understanding Tax and its effect on Nigerian Businesses, organised by the National Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) in partnership with the Lagos Internal Revenue Services (LIRS) and the Federal Inland Revenue Services (FIRS) in Lagos, weekend.
Describing tax as a vital aspect of the nation’s economy, especially as a source of Internally Generated Revenue (IGR) and a way by which government finance social activities for citizens, the national president of NACCIMA, Iyalode Alaba Lawson stressed that there was a need to educate the masses now more than ever before.
She noted that even though it was important to be tax compliant as it gives the people the audacity to question the government when it doesn’t fulfill basic civil responsibilities to the citizens, she pointed out that several challenges continue to prevent people from complying.
They include high tax rates, segmentation and valuation criteria, collection, multiple taxation and perceived inefficient utilisation of the funds generated from tax. “Some contentious tax related matters which require clarification include the Voluntary Asset and Income Declaration Scheme (VAIDS) recently introduced and Value Added Tax (VAT), which many of us need to be enlightened about as well as the appropriate tax collection authorities.”