Efficient Tax System Vital to Economic Growth, Says FIRS

 In Investor News

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The Coordinating Director, Domestic Taxes Group/Special Adviser to the Executive Chairman, Federal Inland Revenue Service, Mr. Abiodun Aina, says efficient tax system is vital to the Federal Government’s quest to achieve sustainable economic growth and infrastructure development.

He said since Oil revenue could not sustain economic growth, there is a need to widen the country’s tax base. According to Aina, the FIRS has changed the narrative under the current administration in terms of helping the Government to achieve its developmental goal through the use of tax revenue. Aina spoke in Lagos as a special guest of honour at the 38th induction ceremony of the Chartered Institute of Taxation of Nigeria where 409 candidates were inducted.

Analysing how the tax agency has transformed taxation in the country, the coordinating director explained that the average non-oil collection was currently 65 per cent, with Oil accounting for 35 per cent of total collection. He noted that Nigeria’s Value Added Tax collection, which was N60bn per month before the current administration, had risen to N90Bn, saying,  “We are pushing very hard believing we will cross over N100Bn threshold monthly.”

Comparing Nigeria’s six per cent tax to Gross Domestic Product ratio with some countries in Europe and Africa, Aina explained that the only time-tested source of reliable funding for Government projects was taxation.

Aina said, “And if we look back and consider our environment, we see a correlation between systems that are efficient in tax collection and development. There is a correlation. Check out Denmark and Norway; check out all the Scandinavian countries. Tax revenue to the GDP ratio in some of these countries is about 50 per cent. At OECD, it’s about 34.4 per cent. The African continent boasts an average of about 17 per cent. Ghana, our neighboring country, is doing about 20 per cent but in Nigeria today, we are still at six per cent tax revenue to GDP.

“While there is a correlation between efficient tax collection and development, there is sadly a similar correlation between those countries that are not doing well and inefficiency of their tax system. Just check it out.” The President, CITN, Mr. Ikemefuna Ede, described taxation as the most sustainable and proven source of Government revenue.

Ede said the renewed emphasis by Government on taxes to fund its activities and developmental projects as the right way to go, stressing that developed countries had leveraged effective and efficient tax system to drive development and good governance for their citizens.

 

http://www.punchng.com/efficient-tax-system-vital-to-economic-growth-says-firs/

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