Presidency Reveals That 50% of Taxes Paid by Nigerians Benefit Private Individuals.
LAGOS, Nigeria – Startling revelations about the allocation of tax revenue in Nigeria have come to light, with the presidency disclosing that approximately 50 percent of taxes paid by Nigerians ultimately find their way into the pockets of private individuals.
Tope Fasua, the Special Adviser to President Bola Tinubu on economic affairs, shared this revelation during an interview with ChannelsTV on Tuesday, October 24.
Fasua’s comments highlight a significant issue in Nigeria’s revenue collection system. He urged governments at both the federal and state levels to adopt a multifaceted approach that utilizes technology, intelligence, and incentives to increase their revenue streams.
This approach could potentially address the problem of taxes being siphoned off into the hands of private individuals.
Fasua emphasized the need for improved revenue collection without raising taxes, asserting that a substantial portion of the country’s revenue, including taxes, rents, rates, and fees, ends up being diverted due to various infractions and indiscipline.
The presidential advisor stated, “One of the things to do to reduce this hurt [on Nigerians] is to drive revenue.”
He further highlighted that if measures are implemented to block revenue leakages within the system, the Federal Inland Revenue Service (FIRS) might generate more than $14 million by the close of 2023.
Fasua cited a remarkable example of revenue improvement by discussing the case of the Federal Capital Territory (FCT). He explained that the FCT experienced a significant boost in revenue collection after detecting that ground rent payments were not being made as required. By addressing this issue, the FCT is on track to substantially increase its revenue for the year.
In response to this success, Vice President Yemi Osinbajo encouraged governors to take a page out of FCT’s book and explore ways to enhance revenue collection within their respective states.
Fasua concluded that the key to resolving the revenue dilemma lies in utilizing technology, intelligence, and a balanced approach that combines incentives with enforcement.
He believes that by showing individuals the consequences of non-compliance and reinforcing the importance of responsible tax practices, the Nigerian government can significantly bolster its revenue without resorting to tax hikes.