Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has stated that only nine tax heads provide nearly 90% of the tax money collected by the government treasury.
This was said by Edun on Friday at a briefing at the International Monetary Fund (IMF) and World Bank’s current Spring Meetings in Washington, DC.
The Minister pointed out that while there are almost 80 distinct taxes and levies in Nigeria, only nine of them currently contribute significantly to the country’s GDP (gross domestic product) by generating 90% of its revenue.
According to Edun, the government wants to correctly charge people and lessen the number of taxes they pay. This will raise people’s willingness to pay and, eventually, increase revenue collection.
“What should I say at 10% of GDP? It seems as though there are individuals who are not filing their taxes. Our approach is to raise tax revenue without raising tax rates. We wish to use technology to increase the effectiveness of tax collecting.”
“According to our analysis, nine tax heads account for 90% of tax revenue, out of the total 80 taxes imposed by the federal government, states, and local governments.”
“We will be able to double our tax revenue in about three years if we eliminate a large number of these taxes and focus on the nine that yield the current 90% revenue and deploy technology,” stated Edun.
The Minister went on to say that the Central Bank of Nigeria’s (CBN) methods and procedures will be temporarily suspended as part of the Federal Government’s commitment to address the issue of excess liquidity.
He clarified that in order to reduce inflationary pressures and stabilize the currency exchange rate, this measure is intended to foster a cooperative synergy between fiscal and monetary authorities.
Edun observed that by stating that “to get the economy moving in the right direction again, “the two authorities are working together to bring down inflation and pressure on price stability and stabilize the exchange rate with the target of bringing down interest rates so that investors can borrow at a more affordable rate.”
“We must prioritize mobilizing domestic resources over borrowing more. To prevent pressures from repayment and refinancing, we seek long-term resources,” he concluded.
