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NESG seeks sustainable economic agenda through tax

Tax

Seeking to close the knowledge gaps in fiscal policy, and create a sustainable framework to actualise Federal Government’s inclusive economic agenda, the Nigeria Economic Summit Group (NESG), has launched its Citizen Perception Report, “Better Tax”.
 
NESG said Better Tax, the first of several research pieces to be published in support of tax reforms, is the product of a nationwide perception survey that cuts across households and small businesses in the tax value chain.
 
The initiative tasked government at all levels to establish an Office of Tax Simplification (OTS) among other recommendations targeted at demystifying complex provisions in the nation’s tax laws and boosting dwindling revenues from the non-oil sector of the economy.
 
Speaking at the Fiscal Policy Roundtable organised by NESG recently in Lagos, Chairman, NESG, Sarah Alade, said the core concept of the Roundtable was to reflect on the needs and objectives that forms the basis of a robust fiscal reform platform focused on mobilising and growing Nigeria’s tax revenue.

She said the International Monetary Fund (IMF) estimated that revenue collected in 2016, across all tiers of government was only about six per cent of the nation’s Gross Domestic Product (GDP).

She maintained that this limits Nigeria’s ability to credibly execute its development plan; fund critical social sector programmes, and also leaves it very vulnerable to macro-economic shocks from low oil prices.

However, she noted that more than 70 per cent of the revenues generated came from the oil sector, while the non-oil sectors, which accounts for more than 90 per cent of the GDP, historically contributed about 30 per cent.
She added that: “The most recent fall in oil prices threw Nigeria into a fiscal crisis with spill-over effects on the economy, resulting in a recession in 2016.
 
“Building a strong revenue base that is balanced between the oil and non-oil sector is therefore critical to sustainably financing Nigeria’s development programme and long-term macro-economic stability.
  
“Beyond the general clamour for increasing revenues and the correlation with higher tax rates, there is the presumption that the Nigerian citizenry is apathetic to the payment of taxes, which makes the findings of the Citizen Perception Survey crucial.

“The findings show that Nigerians are not averse to taxpaying given proper education and expenditure transparency on the allocation and application of resources by the Government.”
  
In his remarks, Fiscal Policy Roundtable Co-Chair, Doyin Salami, said government has been unable to meet recurrent and capital expenditures following a budget deficit of N3.8 billion and debt profile of N22.7 billion.

Salami, who was represented by PWC West Africa Tax Leader and Research Director, NESG Fiscal Policy Roundtable, Taiwo Oyedele, disclosed that low tax compliance was caused by tax complexity, crisis of trust in the government and inadequate social contract deliverables.
 
He further noted that tax officials are constrained by inconsistent tax policies, limited resources, unrealistic targets, and inability to influence service delivery, among others, noting that about 70 per cent of Nigerians believe that taxpaying was right.

Speaking during a panel discussion on, “Making Taxation Work for Nigeria – Issues, Solutions and Priorities,” the President, Manufacturers Association of Nigeria (MAN), Ahmed Mansur, said tax revenues are part of the bigger issue of the missing link in the social contract between the people and the government.

Beyond the general clamour for increasing revenues and the correlation with higher tax rates, there is the presumption that the Nigerian citizenry is apathetic to the payment of taxes, which makes the findings of the Citizen Perception Survey crucial.

   

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