Taiwo Oyedele, a Fiscal Policy Partner and Africa Tax Leader at PwC, chided the government for taxing poverty in Nigeria.
He urged the government to explore an inclusive economic growth rate that will focus on taxes, reduce the economic burden on SMEs, and increase the tax net of non-paying upper middle-class institutions, especially the MDAs.
Oyedele disclosed this at the Nairametrics Economic Outlook webinar held on Saturday, July 16.
We might end up like Sri Lanka
Responding to a question about why Nigeria’s GDP growth rate has remained under 5%, he said, “GDP growth is under 2% in ten years, and population growth has maintained at 3%. This means every day more people are falling into poverty. Growth rate is not inclusive.”
- He also mentioned that rising inequality needs to be taken into account, warning that if nothing is done, Nigeria may end up like Sri Lanka.
- He warned that some households with employment are spending most of their household income on food, as the food inflation rate continues to rise.
- “What we need to do is make the country work for everyone. Almost 100 million people are living in poverty,” Oyedele stated, urging that government welfare policies need to have more impact, as sharing N5,000 to the poorest won’t go far.
He said FG must focus on:
- Tax Policy interventions: He said the FG is basically taxing poverty at current rates, warning that if the poverty threshold is $2.15 and the average size of a household is 5 people, it means we are taxing poverty when people can’t feed.
- “If you tax people earning N70,000 or less you are taxing poverty. The top 1% make up more than half of government revenue so government policy should focus on the middle and upper class and not on poor people.”
- SMEs: He urged the FG to reduce over-regulation and stop being a burden by bringing tax coordination as well as FX regime coordination and improvement. “There is over-regulation and multiple regulations for small businesses.”
Oyedele also urged that other means for increasing FG revenue is to be more efficient with tax collation for the upper class, citing that tax funds can’t come from the poorest, as the top 5% of a population is usually responsible for most taxes in developed countries.
Tax Harmonization – “We need to harmonize taxes; We have unofficially over 200 taxes with only 10 doing well.” Oyedele also remarked.
MDAs don’t pay tax – He urged the MDAs must remit taxes on staff and the FG must harmonize taxes by reducing the taxing agencies which should work in tandem with blocking leakages.
“MDAs do not remit Withholding Tax to the government. You will be surprised to know that the National Assembly, Presidency, and EFCC do not remit taxes according to the audit report of the auditor general.” Oyedele
Dayo Obisan on what the government is doing
- Nairametrics reported earlier that Mr. Dayo Obisan, the representative of the Director-General of the Securities and Exchange Commission (SEC), Lamido Yuguda, at the Nairametrics Economic Outlook webinar said Focusing on the step-by-step implementation of Nigeria’s National Development is one of the keys to achieving economic growth in Nigeria
- Obisan who is the Executive Commissioner (Operations) at Securities and Exchange Commission, Nigeria, said Nigeria’s National development plan already has six objectives that touch on different sectors.
- Mr. Obisan who said productivity would alleviate poverty noted that in Nigeria, a lot of policies have been put up, but the issue usually is the implementation of those policies.
I have questions For mr. Taiwo Oyedele on this publication that’s causing a lot in me and others thoughts. Resolution to this will be highly appreciated and rewarding.
Sincerely.
Almost every Nigerian understands the problems; why don’t we create a platform to engage the people in government. There is a Nigerian economic summit group; we should come together, articulate all the recommendations, and engage the minister of finance, FIRS chairman, executive of the national assembly, and state governors to drop the suggestions on their tables.
All the conclusions and recommendations are not going anywhere except the governments at all levels receive them. If they are not responding, we will make a national press release. We cannot continue to go round in cycles. There will be a change of government in 2023; the incoming administration can pick the recommendations. Let us address all the sectors and what needs to be done.
It is not just about tax. The economy is an integrated system, and unless we are strategic and systemic in our approach and recommendations, we will create a gap that will jeopardise any effort in one sector. Last year, we imported a whopping N2trillion in food, which is massive pressure on the Naira. The Power sector is not working; even if the government reduces the tax rate, there is no electricity to power business. We are exporting gas, yet we don’t have gas in Nigeria. We are exporting crude, yet we cannot refine it in Nigeria. It is a shame that Nigeria is buying refined petroleum products from the Niger Republic.
We need to develop a holistic program of action to help government solve the problems to prevent the impending disaster.
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I deeply appreciate the delivery of this timely and practical lecture by Mr. oyedele, the burning issue here like every other brilliant delivery in Nigeria system is that how well will these suggestions be implemented? Namely :
1. The taxing of top (super rich) and middle income earners and MDAs ensuring that these taxes are remitted as stipulated by law
2. Harmonizing various tax agencies to ensure that there’s no overlapping of functions or redundant ones.
Zenith that is just declining people, no wonder they are too, after all my years with pos, zenith has declined and debited their customers up to 1 million, some are refunded back while some customers don’t bother about it. They r mad.