A tax expert, Mr Abulazeez Musa, on Thursday advised the Federal Government to adopt progressive taxation system to boost revenue generation in order to enhance fairness in the country’s fiscal governance system.
He gave the advice in an interview on Thursday in Jos. Musa heads the Public Engagement Department of Oxfam in Nigeria.
Oxfam is an international group of 17 Affiliates, committed to creating a just world without poverty.
In Nigeria, Oxfam works in the areas of Economic Justice/Sustainable Livelihoods, and Humanitarian Programming to save lives, advancing gender justice and good governance while adopting the right based approach.
He said that the country should also adopt new economic and social spending policies to address high level of inequality in the society.
Musa, however, lauded the efforts of the Federal Government and sub-national governments in their present adoption of Voluntary Assets and Income Declaration Scheme (VAIDS), which enables tax defaulters the opportunity to comply in terms of tax remittance to government.
He also commended the Federal Government’s efforts at alleviating poverty through the National Home-Grown School Feeding Programme, N-Power, Conditional Cash Transfer, and the Government Empowerment and Enterprise Programme in the country.
The tax expert lauded the government on the review of the national tax policy, saying “which if backed by appropriate law and properly implemented, will solve the tax and revenue related leakages.’’
However, he requested that the government should do more and implement a policy that would close the gap between the rich and the poor.
The tax policy expert noted that the tax policy in Nigeria was largely retrogressive, where the burden of taxation mostly falls on the poorer companies and individuals.
According to him, big multinational companies receive tax waivers and tax holidays and utilise loopholes in tax laws to shift huge profits generated in the country to low tax jurisdictions, thereby denying the country the much needed resources for finance development.
Musa disclosed that adopting the progressive taxation system would reduce tax burdens on people who could least afford to pay them.
He added that this system leaves more money in the pockets of low-wage earners, who were likely to spend all of their money and stimulate the economy.
“Progressive tax system also has the ability to collect more taxes than the retrogressive tax, as it is a tax system that takes a larger percentage from high-income earners than it does from low-income individuals,” he said.
He opined that Nigeria government should aim at increasing their tax to the Gross Domestic Product (GDP) ratio, through enhancing the collection of taxes from highly paid individuals, large firms and ensuring that tax policies were gender-equalising.
“The Federal Government and state governments should prioritise the eradication of tax evasion, avoidance and commit to strengthen its tax cooperation,” he said. (NAN)