Former Director-General, Budget Office, Mr Bode Agusto, has weighed in on tax evasion and default in payment that has been reported in the media space in recent times. According to him, 200,000 wealthy Nigerians are the biggest tax evaders in the country.
While speaking during the 17th Annual Aret Adams Memorial Lecture in Lagos, with the theme, ‘Nigeria’s economy after oil: How prepared are we?’, Agusto said that there was a need to increase non-oil tax revenues in the country, adding that non-oil taxes collected by all tiers of government in Nigeria averaged 4% of national income in the past five years.
Agusto’s words: “In Angola, it was 8%; Ghana, 16%; Kenya, 18%; South Africa, 24%, and in the OECD countries, 32%. The World Bank says a nation cannot grow meaningfully if tax revenue is less than 15% of national income.
“Why is Nigeria generating significantly lower tax revenues than other key economies in sub-Saharan Africa? In my opinion, it is largely due to poor tax compliance in Nigeria. What if Nigeria were able to increase non-oil tax revenue to 15% of national income? This means that Nigeria will generate an additional N14.4tn in revenues every year.”
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Speaking further, Agusto advised that if the government is to raise the level of non-oil tax revenue, its focus should be on Personal Income Tax, Value Added Tax, and Companies’ Income Tax. He also added that tax laws be made simpler.
The former Director-General also stressed the need for the government to show a willingness to enforce tax laws.
“The next step is for Mr. President to make his PIT returns public annually, then make it obligatory for all those want to work for him to do the same. He should then look at all of us in the face and say, ‘Woe betides you if you don’t comply going forward!
“The biggest culprits with respect to tax evasion are the wealthy 0.1% of the population (or 200,000 individuals) who ought to self-assess themselves to tax but fail to do so. The focus should be on them, not businesses and those in employment who are already largely compliant.
“They should enforce by auditing a sample of individuals; if they have underpaid, ask them to pay such amounts plus a stiff penalty. If they fail, impound their assets, sell and pay the government. Don’t waste taxpayers’ money throwing anyone into jail and start feeding him,” Agusto said in a Punch report.