Chairman of the Federal Inland Revenue Service, Muhammad Nami, has said that only 41 million people pay tax in Nigeria out of the over 200 million population in the country.
Nami made the disclosure at the ‘Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill’ in Abuja on Friday.
He said that in spite of the 41 million taxpayers in the country, Nigeria still earned lower than what its counterparts across Africa generates from Personal Income Taxes (PIT).
“If you also compare that with South Africa where they have a total population of about 60 million people, with just four million taxpayers, the total personal income tax paid in South Africa last year was about N13 trillion. You can now see that these things are not adding up.
“The number of billionaires in Lagos alone is more than the number of billionaires in the whole of South Africa but yet what we generated as PIT from Lagos State was low.
“So if we don’t pay these taxes, there is no way the government will be able to provide the social amenities required, the critical infrastructure required for the wellbeing of the country,” Nami said.
He said that the total collection up to September 31 which had not been fully reconciled with the Central Bank of Nigeria (CBN) and the Nigerian Customs Service is about N4.2 trillion, from this amount, oil-related taxes accounted for only 22 per cent which is N950 billion only, the non oil taxes generated within that period is N3.3 trillion.
Nami said, “People are not willing to pay even when they are appointed as agent of collection, whatever they have collected they find it difficult to remit.
“We assume that we are a rich country, I don’t think that is correct, we only have the potential to be rich, because we have a very huge population of about 200 million.
“If you look at it from the rate of taxes paid in Saudi Arabia with a population of 10 million people, the VAT rate is as high as 15 per cent and what we have in Nigeria is just 7.5 per cent.”
He also said that Nigeria, an oil-producin country, could not be compared to a small country like Saudi Arabia, saying “we are still not there.”
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, urged citizens to always pay their taxes.
She said, “The money from taxes will go a long way, by providing social amenities, among others.”
Ahmed said that efforts aimed at addressing revenue leakages include dimensioning cost of tax waivers and promoting policy dialogue and transparency around tax waiver regimes.
She also said that achieving government budget objectives requires bold, decisive and urgent actions.
“The government remains mindful of the need to provide safety nets to cushion the impact of reform measures on the vulnerable segments of the population,” she said.