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FG urged to tax the wealthy to boost revenue

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By Abdulwasiu Usman

It is of utmost importance for governments to carefully examine tax benefits.

Oxfam Nigeria, a non-profit organization dedicated to societal progress, has urged the federal and state governments to enhance their efforts in collecting taxes from the affluent populace, as a means to tackle Nigeria’s revenue predicament. Ahmed Tijani, the acting country director of Oxfam Nigeria, expressed these sentiments during a press briefing in Abuja where Oxfam International launched its comprehensive ‘Inequality’ report. Tijani voiced concern regarding the imbalanced dispersion of wealth that has had adverse effects on Nigeria’s economy, particularly in relation to revenue generation.

Tijani believes that it is of utmost importance for both the federal and state governments to carefully examine tax benefits and exemptions given to prominent corporations. He expressed that these incentives possess the potential to greatly enhance the nation’s income. Whereas neglecting these levies places the government in a predicament, impeding their ability to deliver crucial services such as healthcare and education to the populace. Tijani reported that in December 2023, the Nigerian Investment Promotion Commission granted tax exemptions and incentives to a total of 34 firms who had applied for such privileges under the Industrial Development Income Tax Act of 2023.

Tax expenditures should undergo scrutiny by the parliament.

Notable beneficiaries of this decision include Dangote Sino Trucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, and Stallion Motors Limited. These corporations are granted tax advantages through the pioneer status framework, which is designed to encourage and promote their development. Consequently, they are exempted from paying corporate income taxes for a period ranging from three to five years. Throughout its existence, this strategy has contributed to an accumulated sum of around five trillion naira, equivalent to 18.519% of Nigeria’s approved federal government budget for the year.

The essential root cause of poverty does not stem from resource scarcity, rather it is deeply rooted in the unjust control exerted by the wealthiest over the existing resources. The outcome of negligence to make deliberate investments in vital sectors has given a rise in poverty and inequality. Tijani emphasizes the need for transparency in the incentive-granting process, suggesting that tax expenditures should undergo scrutiny by the parliament and be subjected to public discussion. To foster awareness and trust, he urges the government to create a public dashboard, making tax incentive data accessible to all.

0-5% tax on Africa’s wealthiest could yield 11.9 billion in a year.

In reference to worldwide disparity, Tijani asserted that the wealth of the richest individuals across the globe has amplified by over two-fold, escalating from $405 billion to $869 billion since 2020. This ascent transpired at a staggering pace of $14 billion per hour. Meanwhile, a staggering five billion individuals have experienced a decline in their financial status. According to Tijani, while there is a prediction of the world’s first trillionaire emerging within the next ten years, it is disheartening to note that poverty will still prevail for another 229 years. The wealth of billionaires has escalated by a staggering $3.3 trillion compared to last year, growing three times faster than the inflation rate.

Continuing, he suggested that implementing a tax ranging from zero to five percent on Africa’s wealthiest individuals could potentially result in an annual sum of $11.9 billion – nearly enough to pay for the 2023 humanitarian requirements for Eastern and Southern Africa. The accumulated wealth of the 7 richest Africans amounting to $52 billion, is more than the poorest half of the continent’s population, he said. Extreme wealth has continued its rapid ascent over the past three years, while global poverty remains stagnant at levels seen before the pandemic struck. To bridge this vast divide, Tijani strongly advocates for the revitalization of the state, countering the overwhelming dominance of corporate influence in order to restore balance.

Related Article: FG gives 34 companies 3-year tax break

He further urged the implementation of laws to ensure fair wages, while Oxfam proposed imposing tax on accumulated riches and excessive profits. The director of the organization stated that levying a wealth tax on global millionaires and billionaires has the potential to yield a staggering $1.8 trillion per year. Tijani also requested that the Nigerian Senate revise the Federal Inland Revenue Service (FIRS), aiming to control the procedures for awarding tax breaks to corporations, import duties, tax exemptions, and investment benefits to stimulate economic growth while reducing revenue deficits.

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1 month ago

FG urged to tax the wealthy to boost revenue.It is of utmost importance for governments to carefully examine tax benefits. – Express your point of view.

1 month ago

Addressing wealth inequality is crucial for Nigeria’s economic well-being. Oxfam’s call for taxing the wealthy is timely, emphasizing transparency in incentive granting. Scrutinizing tax benefits for corporations could enhance national income, supporting vital services. The proposed 0-5% tax on Africa’s wealthiest aligns with efforts to bridge economic disparities. Public awareness and parliamentary scrutiny are essential for fair taxation. Overall, prioritizing equitable economic policies is vital for Nigeria’s prosperity.

1 month ago

One way the government might increase money is by taxing the wealthy. The effect that tax laws have on the wealthiest and the economy at large must be carefully considered by governments.To strengthen their efforts in tax collection from the wealthy population, both the federal and provincial governments

1 month ago

The wealthiest should pay more in taxes, according to FG. Governments should seriously consider the advantages of taxes. crucial that state and federal governments closely scrutinize the tax breaks and advantages awarded to well-known companies.insisting that the process of awarding incentives be transparent and that the parliament should review tax expenditures

Adeoye Adegoke
1 month ago

I completely agree that it’s crucial for governments to carefully examine tax benefits and consider various strategies to boost revenue. One potential approach is to focus on taxing the wealthy. By implementing progressive tax policies that target high-income individuals, governments can generate additional revenue that can be used for public services, infrastructure development, and social welfare programs.
Taxing the wealthy can help create a more equitable society by redistributing wealth and reducing income inequality. It ensures that those who have more financial resources contribute proportionally more to the overall tax burden, while also providing the government with the necessary funds to address societal needs.
However, it’s important to strike a balance and ensure that tax policies are fair, transparent, and encourage economic growth. Governments should carefully consider the potential impact of such measures on investment, entrepreneurship, and job creation. Finding the right balance between generating revenue and fostering a favorable business environment is key.
Ultimately, a comprehensive approach to taxation, which includes not only taxing the wealthy but also addressing tax evasion, improving tax collection systems, and promoting fiscal responsibility, can help governments boost revenue and create a more sustainable financial framework.