PricewaterhouseCoopers (PwC) has disclosed that Nigeria’s taxto- GDP contribution now stands at an abysmal six per cent. According to the company, Nigeria’s tax-to-GDP is far less impressive if compared with what is obtained in other countries with the same socioeconomic parameters where tax-to- GDP could be as high as 15 to 25 per cent.
These were some of the revelations made by the Head of Tax and Corporate Advisory Services of PwC, Mr. Taiwo Oyedele, at the just concluded PwC’s annual training for media practitioners in Lagos.
“Currently, Nigeria government has not been able to make tax collection as a major contributor to GDP and there is a need to reverse the trend where tax is contributing significant percentage to the country’s GDP,” he said.
Also, a tax partner with the firm, Mr. Kenneth Erikume, in a session focused on the Voluntary Assets and Income Declaration Scheme (VAIDS), emphasised the role of media in making Nigeria a tax-paying nation. Erikume said VAIDS, an initiative of the federal government, is a time-limited opportunity to regularise tax affairs in the country.
“With VAIDS, Taxpayers can voluntarily disclose and remediate their tax status or face tax audit/ investigation and prosecution after the scheme,” he said.
He noted that VAIDS which was designed to help government raise tax-to-GDP contribution was an initiative led by Federal Ministry of Finance, with active involvement of Federal Inland Revenue Service (FIRS) and Joint Tax Board (JTB).
The tax scheme opened from July 1 2017 to March 31st 2018, and it covers all taxes with particular focus on Federal and state taxes. Meanwhile, Erikume listed low tax-to-GDP ratio, high rate of tax avoidance/ invasion, huge and growing budget deficit, the need to fund infrastructure, revenue diversification, high cost of debt financing, need to increase tax awareness and education among others as reasons for government’s introduction of VAIDS.
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