THE Director General, Budget Office of the Federation, Mr Ben Akabueze, while defending Nigeria’s rapidly-increasing debt burden (which he called “sustainable”) also pointed out that our real problem is our low revenues. He also admitted that we have the lowest tax-to-GDP ratio in the African continent and one of the lowest in the whole world.
Akabueze is not the only person in the Federal Government to be aware of the problem. The Minister of Finance, Mrs Kemi Adeosun, lamented about our low taxes a few weeks ago. The Head of the Federal Internal Revenue Service, FIRS, Mr Tunde Fowler, months ago revealed that the wealthiest Nigerians are mostly tax delinquents. Again, nothing is new about that; these facts were known before President Muhammadu Buhari assumed office.
It was already an established fact that compared with Egypt, 15.8 per cent; Ghana, 20.8 per cent; and South Africa, 26.9 per cent, Nigeria’s tax-to-GDP ratio, at six per cent, was not only pathetic but ultimately self-destructive for a nation which has now chosen to go on an unrestrained borrowing binge.
Nigerians expected that a political party and a leader challenging for office would have undertaken a comprehensive study of the nation’s most intractable economic problems and would have set about providing solutions.
We expected the Buhari regime to come into power with clear strategies for fixing our low tax problems, which their People’s Democratic Party (PDP) predecessors were unable to do in sixteen years. We did not expect them to react to the problem with hand-wringing and a resort to miring the nation in a debt trap from which future generations will sweat to pay back.
Nothing demonstrates this better than the fact that those appointed to fix the problems associated with taxes and increased revenue are weeping about the matter instead of identifying and dealing with the defaulters who illegally sit on the revenues the nation needs, and which will reduce our propensity to borrow.
Two years is definitely more than enough time to have identified and targeted the rich tax dodgers and begin bringing them to book. It is enough time to have discovered those responsible for the non-remittance of billions of dollars by the Nigerian National Petroleum Corporation, NNPC.
We urge the Buhari administration to reduce the tendency to follow the easy road by opting to borrow rather than go after tax dodgers and those behind the refusal or failure of state agencies to duly remit revenues into the Federal purse.
This administration will be leaving a lasting legacy if it summons the courage and effort to rectify our age-long defective tax administration and bring it up to par with what obtains in other parts of the world.