The Nigeria Economic Summit Group (NESG), a Nigerian based policy advocacy organisation established to promote sustainable growth and development in the economy, has said that about 70% of Nigerians considers it no wrong to pay tax The Economic Group revealed this in Lagos during its Fiscal Policy Roundtable event while unveiling its Citizen Perception Report – a research encouraging a better tax system in the country.
The co-chairperson of the Fiscal Policy Roundtable, NESG, Dr Doyin Salami, who was represented by the PWC West Africa, Tax Leader and Research Director, NESG Fiscal Roundtable, Mr. Taiwo Oyedele, said the government had been unable to meet recurrent and capital expenditures following a debt profile of N22.7 billion and a budget deficit of N3.8 billion.
In his statements, while mentioning some findings in the report, he said that “Over 70% of Nigerians believed that it is not wrong to pay taxes. This sentiment is fueled by the issues around the social contract between the government and the citizenry.”
Complexity Of Tax System Results In Low Compliance.
“Low compliance results from tax complexity, crisis of trust in the government and inadequate social contract deliverables while tax officials were constrained by inconsistent tax policies, limited resources, unrealistic targets, and inability to influence service delivery, among others,” Mr Oyedele noted.
The Chairman, NESG Fiscal Policy Roundtable, Dr Sarah Alade, while speaking during the occasion, said the core concept of the forum was to reflect the needs and objectives that formed the basis of a robust fiscal remodeling platform, aimed at mobilizing and growing the country’s tax revenue.
She further mentioned that the International Monetary Fund (IMF) estimated that revenue collected in 2016 across all tiers of government was only about 6% of the Gross Domestic Product (GDP).
Dr Alade added that historically, more than 70% of the revenue had come from the oil sector while the non-oil sectors, which account for more than 90% of GDP, had generally contributed about 30% to revenue.
“This limits Nigeria’s ability to credibly execute its development plan and fund critical social sector programmes. It also leaves Nigeria very vulnerable to macro-economic shocks from low oil prices. The most recent fall in oil prices threw Nigeria into a fiscal crisis with spill-over effects on the economy resulting in a recession in 2016,” she added.
NESG Advocates For The Creation Of A Tax Simplification Office.
The NESG stated that its project called ‘Better Tax’ seeks to close knowledge gaps in fiscal policy and create a sustainable structure to realise the Federal Government’s inclusive economic agenda.
The group noted at the summit that the report was the outcome of a countrywide perception survey across households and small businesses in the tax value chain.
In the report, its recommendations tasked the government to create an office of tax simplification among other suggestions targeted at explaining complex provisions in the nation’s tax laws and to improve on the dwindling revenues from the non-oil sector of the economy.