“Only about 14 million active tax payers (20 per cent) of an estimated 70 million economically active corporate bodies and individuals pay tax annually in Nigeria.
“Out of that number, majority are Pay As You Earn,(PAYE ), who pay amidst widespread malpractice resulting in having only half of the actual income being subjected to tax.”
The Minister of Finance, Mrs Kemi Adeosun, disclosed this on Friday at the Nigerian Stock Exchange, NSE and Bloomberg CEO Roundtable Session in Lagos.
She said there is documented evidence that in the entire nation, only 214 people pay tax of over N20 million and they are all in Lagos State.
Adeosun sounded it clear that, if the country were to witness real growth, it must address the tax revenue generation issues and do so aggressively even if it would mean stepping on big toes.
On the solution to poor infrastructure base in Nigeria, the Minister said the Federal Government had spent over N1.2 trillion on capital projects in the past 12 months .
This is aimed at reducing the complaints of both foreign and local investors on how poor infrastructure is discouraging their interest in Nigeria.
To that effect, government is said to have pledged to continue to prioritise infrastructure spending until there is noticeable improvement.
On road spending she said N200 billion was spent in 2016, which compares to N19 billion in 2015 while transport and aviation received N143 billion compared to N6 billion in 2015.
“We intend to revive Public Private Partnership (PPP) in Nigeria and trying to revive existing and failed PPP projects.
“Though Nigeria’s private sector is efficient, creative and resilient, it needs predictability in policy, hence our(government) resolve to sustain introduction of new assets clause of guaranteed instruments that will provide adequate safeguard for the protection of private capital, she told her audience.
Adeosun who admitted that 2015 snd 2016 posed a rough time for the country, added, that “but the worst is over and we have an opportunity to make sure we don’t go back to where we are coming from the way we did in the past.
“Oil is only 10 per cent of our economy, but it represents up to 60 per cent of our revenue which is why when the price of oil fell, we had a double impact. We lost revenue and government found it difficult to really meet its needs. ”
She disclosed that the Federal Government had already signed Global Convention on base erosion and profit shifting Act, which do not allow companies that generate profit in Nigeria to evade taxes by shifting their profit to countries or jurisdiction where little or no tax is payable.
Lamenting on the fact that many Nigerians do not pay tax as expected, Adeosun said that revenue mobilization is key to the success of the country’s economic reform agenda.
She stated further: “To do this, we must amend Nigeria’s low level of tax compliance. Our tax to Gross Domestic Product, GDP of 6 per cent suggest widespread ignorance of our tax laws.”