96% Of Nigeria’s Income Goes To Paying Off Debts

Zaccheaus Adedeji, the recently appointed acting executive chairman of the Federal Inland Revenue Service (FIRS), has bemoaned the fact that Nigeria spends 96% of its income on debt servicing and promised that the trend will soon change.

Adedeji pledged to take immediate action to change what he called a “unhealthy fiscal system” during a speech he gave yesterday at the FIRS Headquarters in Abuja.

“We cannot afford to delay; we must act decisively to reverse this ugly trend. Our aspiration is audacious— to surpass Africa’s average tax-to-gross domestic product (GDP) ratio of 16.5 per cent and achieve an impressive 18 percent within three years. By doing so, we aim to reduce our nation’s reliance on borrowing and ensure financial sustainability,” he said.

He claimed that through fostering an environment where taxpayers actively carry out their civic responsibility, his purpose is to foster voluntary tax compliance.

“Our overarching goal is to nurture voluntary tax compliance by establishing a modern, dependable tax system that garners the trust and admiration of all stakeholders. Through this, we hope to create an environment where taxpayers willingly fulfill their civic duties.”

Explaining to taxpayers the importance of their civic duty is a crucial part of our role. We are dedicated to make our tax system accessible, clear, and simple in order to encourage voluntary tax payments and promote a sense of civic responsibility, the official continued.

He did, however, issue a warning that individuals who try to avoid paying their taxes would not be spared.

According to him: “We will enforce our responsibilities judiciously. We will implement a robust enforcement model that effectively deters tax evasion while maintaining fairness and transparency in our processes.”

He congratulated Mohammed Nami, his predecessor, saying that his leadership raised the bar and his dedication to excellence created an amazing precedent.

The new chairman also pledged that, while in office, FIRS will prioritize new ideas, technology, and innovation in all aspects of its operations.

“This strategic focus will empower us to enhance efficiency, fortify against revenue leaks and bolster coordination and accountability within our organisation,” he said.

He stated that “Quality data will be the cornerstone of our operations, enabling us to measure our progress, make informed decisions, and maintain the highest standards of accountability. We recognise that data-driven strategies are essential to our success.

“I pledge to maintain an open-door policy, actively engaging with stakeholders to collaboratively construct a tax administration that we can all take pride in. Together, we will build an institution that serves as a beacon of excellence.

“We are determined to align ourselves with President Bola Tinubu’s esteemed Fiscal Policy and Tax Reforms Committee. This collaboration will enable us to shape a prosperous fiscal landscape that empowers our nation’s growth and development.

The environment Nami encountered in 2019 when he took office, according to Nami, was marked by a flimsy administrative structure, ineffective procedures (mainly manual), antagonistic labor relations, a lack of funds, and a mutual mistrust between staff and management.

Low worker morale, the Service’s struggle to carry out its mission, subpar performance, a lack of funding to support government initiatives, and a low tax-to-GDP ratio were the overall effects, he claimed.

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