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As part of its effort to generate revenue from non-oil sector, the Federal Government has set an aggressive target to increase tax collection in the country.
President Muhammadu Buhari disclosed this at the 21st annual tax conference organised by the Chartered Institute of Taxation of Nigeria (CITN) on Wednesday in Abuja.
Buhari was represented by the Permanent Secretary in the Ministry of Finance, Dr. Mahmoud Isa-Dutse.
He noted that tax collection must grow in line with the growth in economy, lamenting that this has not been the case in Nigeria.
The President said: “Our tax system must reflect the nature of our commercial activity levels. Oil is just above 10 per cent of our Gross Domestic Product (GDP) but it represents a disproportionate share of our tax revenue.
“We will, therefore, develop a framework that mobilises revenue from the non-oil sector. Our tax system must be dynamic in order to respond to an ever-evolving commercial landscape and to increasing technology driven business models.
“As part of our drive to increase non-oil revenue, we have set an aggressive target for increasing tax collection. This is a reflection of the fact that the current level of compliance is low and in some cases, the effective tax rate paid by those that are compliant is lower than expected.
“This administration has been instrumental to critical reforms in the Nigerian tax system, through for instance, the introduction of the tax amnesty regime under the Voluntary Asset and Income Declaration Scheme (VAIDS) and the Voluntary Offshore Assets Regularization Scheme (VOARS).
“These measures have no doubt led to improvement in voluntary tax payment compliance by the citizenry.
“On the VAIDS, for instance, 5,122 applications were received, at the end of July 2018, when the Scheme had gone through a 12 month cycle and entered sunset.
“Out of these applications, 1,006 made full payment, 1,613 had outstanding payments to make and 2,503 fell under those who did not furnish adequate information on their tax status.
“Arising from these applications, N92.67 billion tax liability was declared. N34.67 billion had been paid out of declared liability. The outstanding liability of N56.81 trillion will be paid in installments.
“In all, 16,906 assets were declared under VAIDS. Of these, 3,317 are immovable assets, 13,771 are moveable assets, while 205 represented intangible assets & Investments.”
Addressing stakeholders and players in the taxation sector in the conference tagged: “Taxation and national development: Unlocking the potential of taxation”, Buhari noted that Nigeria’s tax-to-GDP ratio, although has improved from six per cent to about nine per cent in the last three years, is still the lowest in the world.
The Chairman of Heirs Holdings, Mr. Tony O. Elumelu, in his paper delivery noted that we can never talk about national development without the inputs from Micro, Small and Medium Enterprises (MSMEs).
Elumelu said: “On one hand, our citizens demand good standard of living – education, healthcare, infrastructure, accommodation, security, moral values etc.”