New Telegraph

Low-tax-to-GDP no licence for tax hike –Adesina

The President, African Development Bank, Dr. Akinwumi Adesina, has said that Nigeria’s low tax to GDP does not call for frequent increase in taxes by the government. He said while other other countries with high tax rates have functional free education and free health care system among others, such could not be said of Nigeria.

 

He made this known yesterday at the annual lecture of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja. This year’s conference is themed: “Trust in governance.”

 

The AfDB president said while tax to gross domestic product ratio in Nigeria is relatively low, it is not an excuse to keep raising the tax rates. He noted that the inefficient system in Nigeria had imposed an implicit tax on Nigerians as the people are made to provide basic essential facilities that should have been made available by government.

 

“While tax rates are relatively low in Nigeria, it simply is not an excuse to keep increasing taxes. Take the case of Norway for example. Its tax-to- GDP ratio is 39 per cent. Singapore’s tax-to-GDP ratio is 13.2 per cent.

 

And Nigeria’s tax-to-GDP is 6.1 per cent. It is easy to make the comparison and say Nigeria needs to raise its taxes to similar levels as in Norway or Singapore”

 

“But also consider the following: In Norway, education is free through university. In Singapore, a country that had only 1/3 of Nigeria’s per capita income at its independence in 1965, today has 100 per cent access to electricity and 100 per cent access to water.

 

“While progress is being made the challenge, however, is that in many parts of Nigeria, citizens do not have access to basic services that governments should be providing as part of the social contract.

 

“People sink their own private boreholes to get water. They generate their own electricity oftentimes with diesel. They build roads to their neighbourhoods. They provide security services themselves.”

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