The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has highlighted that approximately 90% of tax revenue flowing into the government treasury originates from just nine tax heads.
Despite Nigeria having around 80 different taxes and levies, these nine sources significantly contribute to the Gross Domestic Product.
Edun emphasized the government’s objective to streamline the multitude of taxes and accurately bill individuals, aiming to bolster people’s willingness to pay and consequently enhance revenue collection during a briefing at the ongoing Spring Meetings of the International Monetary Fund and World Bank in Washington DC.
He stated the importance of increasing tax revenue without raising tax rates, proposing the deployment of technology to improve tax collection efficiency.
Commenting on the current scenario where tax revenue stands at 10% of GDP, Edun hinted at potential tax evasion issues, outlining a strategy to concentrate on the nine tax sources generating 90% of the revenue while leveraging technology for more efficient tax collection.
He said, “At 10% to GDP, what should I say? It would appear as if some people are not paying their taxes. Our strategy is to increase the tax revenue without increasing the rate of taxes. We want to deploy technology to make tax collection more efficient,”
“If we eliminate the large number of these taxes and concentrate on the nine that yield the current 90% revenue and deploy technology, there will be more efficiency and we will be able to double our tax revenue in about three years,” Edun added.
He expressed optimism that this approach could potentially double tax revenue within three years.
Moreover, Edun addressed the Federal Government’s commitment to addressing excess liquidity issues by temporarily suspending the use of ways and means from the Central Bank of Nigeria.
This move aims to foster collaboration between fiscal and monetary authorities to mitigate inflationary pressures and stabilize the currency exchange rate. The goal is to lower interest rates, making borrowing more accessible for investors and steering the economy in a positive direction.
Regarding food security concerns, Edun highlighted government efforts to facilitate farmers’ access to their fields, particularly in regions affected by insecurity, which has hampered food production. Additionally, the establishment of agro clusters in partnership with the African Development Bank is aimed at boosting domestic food production.
Accompanying Edun at the meeting were key figures including former Minister of Finance Zainab Ahmed, Permanent Secretary of the Federal Ministry of Finance Mrs. Lydia Shehu Jafiya, Governor of the CBN Mr. Olayemi Cardoso, and other senior government officials.
