By Bayo Amodu
The International Monetary Fund, IMF, yesterday urged Nigeria to urgently review the country’s tax policies by widening the tax base and increasing compliance on Value Added Tax, VAT.
Speaking at a panel session on ‘Leveraging Dom Amine Mati estic Resource Mobilisation for Sustainable Development,’ at the 2018 Nigerian Economic Summit, NES, in Abuja, yesterday, Mission Chief and Senior Resident Representative of IMF in Nigeria, Mr. Amine Mati, noted that these measures would help bring about a significant increase in Nigeria’s revenue base. He said: “In terms of non-oil revenue, at four to five per cent of GDP, this is very low. Though, it is important to note that the government is working to improve on this. There used to be an excise on fuel products in 2009, which used to bring quite a lot and that had been discontinued since 2009.
“One interesting thing about excise for quick revenue generating measure, in changing the rate, you do not need to go through parliament and the whole process; this is an executive decision that can be made. In Nigeria, excises only bring 0.1 per cent of GDP. This is one of the easiest sources of revenue to get. 0.1 per cent of GDP compared to three per cent of GDP compared for ECOWAS and most other countries.
“In terms of proper tax collection, excise in Nigeria is only 2.3 per cent. This tells you how much potential there is in trying to get revenue up. Some of the recommendations here is to have specific excise — such as excise in fuel products, excise on luxury goods, including on airtime fees. We just need some small simulation on that. That would give you 0.8 per cent of GDP within a year; that is money you can spend on import and development spending.”