Adeosun: Nigeria’s Economic, Political Development Tied to Tax Compliance

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By Vincent Obia
   

Minister of Finance, Mrs. Kemi Adeosun, has said that Nigeria’s capacity to join the league of economically prosperous countries was dependent on the willingness of its nationals to pay their taxes.

 Adeosun stated this in Lagos at an interactive session for executives and business owners on the Voluntary Assets and Income Declaration Scheme. She said the most economically and political prosperous countries also had high tax compliance rates.

Equally at the event, which was hosted by leading professional services provider, PwC Nigeria, the chairman of Lagos Inland Revenue Service, Mr. Ayodele Subair, called for the autonomy of state inland revenue organs, saying this would remove unnecessary official procedures that hinder their effectiveness.

 “The fortunes of Lagos changed when the board gained autonomy,” Subair said, referring to the state’s revenue board, which was reorganised and freed from obstructive bureaucracy since the administration of Asiwaju Bola Tinubu at the dawn of the Fourth Republic in 1999.

VAIDS, which was launched by Acting President Yemi Osinbajo on June 29 in Abuja, is a nine-month amnesty for tax defaulters to regularise their tax positions by declaring all previously undisclosed assets and incomes in return for forgiveness of overdue interests and penalties. It runs from July 1, 2017 to March 31, 2018, and is being implemented by the federal government in conjunction with the governments of the36 states of the federation.

Adeosun said tax payment by citizens would elicit effective political participation by the people, as they would show more interest in knowing how their money is being spent by their representatives.

“When people pay tax, they get involved. It actually improves the democratic process. As our tax revenues go up, governance would improve,” she stated.

The minister lamented Nigeria’s tax to GDP ratio of six per cent, which was among the lowest in the world, saying poor tax compliance had adversely affected the quality of governance in the country.

“Let people start paying tax, I assure you, governance would improve,” she said.

According to her, tax payment would give the people the confidence to hold their political representatives to account, and this would in turn put the political office holders under pressure to perform. She said Nigeria was a country with great potential, but stressed that the latent qualities would not produce economic development if the citizens failed to fulfil their tax obligations.

The event, which was held at Oriental Hotel, had in attendance officials of the Federal Inland Revenue Service, top business executives, regulators, and entrepreneurs.