Given the world’s strive to ensure economic growth and development, generation of revenue through tax collection has increased as an alternative and sustainable means of funding major infrastructural projects across the world. The negative economic effects of the COVID-19 pandemic, the Russian-Ukraine war and natural disasters have greatly contributed to this increase. These factors among others have heightened the roles of taxes in sustenance of developmental projects mostly in underdeveloped countries like Nigeria that require a regular flow of income to fund public investments and social programs.
Minister of Works and Housing, Nigeria, Babatunde Raji Fashola, stressed the need for Nigeria to employ tax revenue for sustenance of infrastructural projects, expressing the fact that a contractor handling any developmental project can only be paid by the government if there is availability of money. Two recurrent recessions in less than a decade has almost led the country into economic stagnation, fostering more borrowing from diverse sources. These borrowings has led the country to own a debt portfolio of over N77 trillion.
FIRS commendably reduced funding gap in the country.
To salvage this situation, there was an establishment of Federal Inland Revenue Service (FIRS). The service, despite the economic downturn caused by the COVID-19 pandemic, has been able to contribute significantly to the nation’s Gross Domestic Product (GDP). During the regime of Muhammad Nami, FIRS commendably reduced the funding gap through provision of required resources to enable sustenance of government programs, payment of salaries and execution of major infrastructural projects. In 2021, across the N6 trillion threshold, the service hit a tax collection record of N6.41 trillion.
In 2022, FIRS increased its contribution to the nation’s GDP, contributing N10.1 trillion in tax revenue. The efforts of FIRS has helped the speedy recovery of the country from the impacts of the COVID-19 pandemic. Tax revenue is a catalyst that drives human capital development through projects. In Nigeria’s Tertiary Education according to the Vice Chancellor of Bayero University Kano, Prof. Sagir Adamu Abbas, there was an approval of N12 billion by the Tertiary Education Trust Fund (TETFUND) to establish 12 research centers in Nigeria’s six geopolitical zones to achieve improved capital development.
2.5% of Nigerian-registered firms’ profit from Education Tax.
Prior to this moment, many public institutions in Nigeria had poor infrastructure that deprive them of conducive learning environments; a result of inadequate funding. Mitigation of this situation was achieved through the Education Tax — 2.5 percent of company’s profit imposed on every Nigerian registered firm. The Executive Secretary of TETFUND, Sunday Echono, stated that in the last three years, the Fund has spent over N2 trillion to finance infrastructural developments in federal universities, polytechnics and colleges of education.
Vice Chancellors, Provosts and Rectors of public tertiary institutions across the six geopolitical zones in the country have affirmed the tremendous impacts of the Education Tax funds collected by FIRS in human capital development, infrastructural development and research in respective institutions. The Provost of Federal College of Education Abeokuta, Dr. Rafiu Adekola Soyele, asserted that the college has since 2011 benefitted immensely in aspects of facility and capacity building for staff, infrastructure, non-teaching staff and more. With this, he greatly applauded the government for its support.
The service will maintain and improve the momentum this year.
FIRS, considering the efforts put into ensuring availability of funds in diverse sectors of the economy, asked that the resources as judiciously implemented by the government at all levels so as to encourage citizens to adhere to their tax obligations. The FIRS boss, Nami, believes that the service is yet to attain all the feats there is in tax collection enhancement. Therefore, he affirmed that the service is focused on maintaining and improving the momentum this year. Identification of more areas where there can be improvement in collection delivery and efficiency amidst deployment of innovative data and artificial intelligence is its main goal.
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Tax revenue boosts the Nigerian economy – Africa’s giant owns a debt portfolio of over N77tn yet keeps borrowing. – Express your point of view.
Tax revenue can provide the necessary funds for investment in critical sectors and infrastructure. The increase of tax revenues will lead to improved social welfare, higher productivity and reduce the burden on the government. The Nigerian government should implement policies and strategies to encourage and to improve revenue collection.
The tax revenue in Nigeria is not well structured. Although the government is receiving and still we don’t really see much of it’s impact on Nigerians.
Even when the benefit of generating revenue through tax is known to us, our government doesn’t seems to prioritize our t and no strong regulation is imposed on it. There are still many who evade tax and go free in the country.
Tax revenue serves as a huge part of Nigeria’s revenue, but the corruption In the Federal inland revenue service is excessive and this is why the revenue that’s being reported is low
It is unfortunate that many government facilities in Nigeria have substandard equipment, which deprives them of favourable learning settings and this is a direct result of insufficient funding, and this is exactly why we need our government.
I know these tax policies are good for the growth of the country because it is affecting all the people that do not have enough money and they are being taxed daily on everything they do.
I wish the government will realize that the major objective is to identify additional places where collection delivery and efficiency can be enhanced through the application of novel data and AI.
That true tax revenue can boost our country economy of we generate enough tax that can serve the country well we will not be borrowing money Talkless of the country owning debt
Tax revenue is the major way by which economy of a country or a state can be boosted and this is fact but the major problem facing revenue collection in Nigeria is corruption and this has made lots of citizens no to be truthful in paying their tax.
Tax revenue boosts the Nigerian economy. Tax is very important to generate revenue for the country. But when have government that is stealing from the masses without doing the needful. They are enjoying everything, seeing the poor masses suffer paying tax. And government is receiving big allowance
Nigeria is blessed with abundant resource that can generate enough revenue for the country that can be use to pay our debts. Given the state and condition of the country it will be unwise for the Federal Government to depend completely on tax to boost our economy. Other means should be use for this purpose rather than over burden the masses.
The country’s debt portfolio is well over N77 trillion and yet the government kept on borrowing. The problem of this country is just mismanagement. Other countries have be known to use tax to run their country and it is working for them. Those countries don’t have natural resources like ours but are doing well. Tax alone can’t boost the country economy.