The Federal Government has been charged to urgently focus on other quick wins that can boost economic growth as a means to increasing revenue through inward investments and increased tax compliance by businesses.
Chief Executive Officer, SD and D Capital Management Limited, Idakolo Gabriel who gave the charge at a stakeholders meeting in Abuja, said the continuous increase of tax in the country will further impoverish the already poor Nigerians.
Speaking on the theme “Rising Tax Obligation Amid Dwindling Purchasing Power”, Idakolo sees the increased Tertiary Education Tax (TET) rate from 2% to 2.5% and the Introduction of excise tax on Non-Alcoholic, carbonated and sweetened beverages as burdensome to the citizens.
The SD and D boss averred that such “measures will further increase the cost of goods because the manufacturing companies would pass the extra cost of the (TET) down to the consumers which will in turn lead to higher cost of goods and services.
“The Non-Alcoholic, carbonated and sweetened beverages sector has been witnessing consistent increases in the prices of their product over the past 5 years and it is believed that this measure will definitely increase the cost beyond the reach of ordinary Nigerians.
“Taxes have had very negative impacts on businesses in Nigeria. In many cases businesses have been taxed out of existence”.
He urged the Nigerian government to
introduce zero per cent Welcome Tax
rate for new businesses for the first three years, in order to boost economic growth.
Also that Government should lay more emphasis on Job sustainability by aggressive increase in funding for SMEs, Agriculture and the entertainment industry which he noted could create sustainable jobs for the youths.
To expand the nation’s tax base, Mr. Gabriel stressed the need for government to reposition the economy by boosting consumer spending and
improving the business climate for the private sector to thrive.
He however noted that corruption and lack of implementation competencies required to drive public policies could mitigate against a successful tax administration in Nigeria.
Idakolo was of the view that increased tax revenue should not only be beneficial to the government but also to the citizens through provision of more infrastructure by government.
“Despite tax payment by corporate and individual Nigerians, the people are still saddled with the provision of basic public utilities like security,
water supply (boreholes), power (generating sets) and even road networks to access their homes
“The poor state of public utilities has taken a toll on quality of life, purchasing power and profitability of businesses” Gabriel observed.
To this end, the Financial Expert advised government to reduce deficit financing so that there will be less funds for debt servicing and more for key infrastructural projects.
According to him, “Nigeria`s infrastructural deficit is still wide across road, rail, airports, seaports and power despite government efforts in the past 5 years to revamp this sectors.
“The few key projects of this government has come with very high cost which means the government is over borrowing for these projects”.
He recalled Nigeria`s debt-to-GDP ratio stands at 35.51% in 2021 according to statistics of the Debt Management Office, while urging the government to redirect its policies to embark on projects that can fund itself even if funds are sourced for the execution of such projects.
Commending the giant strides achieved by the FIRS in 2021 with the introduction of the automated tax administration system called ‘TaxPro Max’, which is expected to help taxpayers experience ease in the areas of registration, payment and issuance of Tax Clearance Certificates, Mr Gabriel called for adequate sensitization of the tax paying public on how to effectively utilize the platform.