El-Rufai laments low rate of tax collection

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Kaduna state Governor,Nasiru El-Rufai

Kaduna State Governor, Nasir El-Rufai, has lamented the low rate of tax revenue collection in the Nigeria.

The governor also said the country is almost reaching its maximum capacity to borrow and must be proactive in ramping up tax revenue collection.

El-Rufai stated this while delivering his keynote address at the 22nd Annual Tax Conference of the Chartered Institute of Taxation of Nigeria, with the theme ‘Taxation and economic competitiveness: Imperatives for national development’.

According to him: “Only a minority of Nigerians pay income tax, and the majority of this tiny minority are persons whose taxes are deducted at source, formal sector employees, public servants and the like.

“Perhaps as a result of colonial experience, we have been living in a country where paying taxes is treated as an illegitimate imposition. Voluntary compliance with the obligation to pay income tax remains a challenge.”

The governor hinted that many state governments and the Federal Government are not collecting as much tax as they should.

“The total internally generated revenues by states are currently less than one per cent of the GDP, despite the fact that Nigeria’s current fiscal federalism framework allows states and local governments to collect many taxes, levies and fees.

“This low rate of internal revenue collection depresses public finances and hampers the ability to deliver social goods, services and physical infrastructure.

“This in turn limits competitiveness, shrinking the ability to promote the sort of economic dynamism that can create jobs, expand public revenues and improve public welfare.” El-Rufai said.

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