Nigeria’s tax revenue ratio to GDP drops, Okonjo-Iweala says

Finance Minister, Ngozi Okonjo-Iweala
Finance Minister, Ngozi Okonjo-Iweala

The Minister said of the 12 per cent Tax revenue ration to GDP, only four per cent was non-oil revenue.

The Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, on Monday said that the tax revenue ratio to the country’s Gross Domestic Product, GDP, has declined from 20 per cent to 12 per cent.

Ms. Okonjo-Iweala spoke at the inauguration of the Federal Inland Revenue Service, FIRS, Multipurpose Training School in Abuja.

She spoke again about the county’s GDP increase from N42.3 trillion to N80.3 trillion, making Nigeria Africa’s largest economy.

The minister said that of the 12 per cent, only four per cent was non-oil revenue. She described the situations as not good for the country.

She urged FIRS to redouble its efforts by improving the capacity of the staff, while improving the revenue collection system.

“We just celebrated the fact that Nigeria has now become the largest economy in Africa with N80 trillion of GDP.

“This makes us the 26th largest economy in the world and advances us on our goal to become one of the 20 largest economies in the world.

“But now with this recalculation, our revenue to GDP ratio is 12 per cent and our non-oil revenue ratio to GDP is four per cent, which means that we live worse than before.

“As you know, our revenue ratio to GDP before was 20 per cent, just about in the middle of the emerging market economy, not as good as the 22 per cent that we want to be.

“For tax revenue to GDP, we now have to redouble our efforts to get back to the 20 per cent ratio at least to where we were before,” she said.

Ms. Okonjo-Iweala expressed confidence that FIRS would rise up to the challenge and bring the country’s revenue ratio to GDP back on track with its initiative to establishing a training school.

She urged FIRS to step up Nigeria’s capacity to handle transfer pricing and address the issue of tax evasion as she said billions of dollars was lost every year.

“I hope that this academy will bring in experts who know how to handle transfer pricing and I know that FIRS will live up to its mandate t do more, even though it is currently doing well.

“The news I bring to you this morning is not a deterrent but an incentive to do more,” she said.

In an address of welcome, the Acting Executive Chairman of FIRS, Kabir Mashi, said that capacity development was an integral part of the tax reform programme of the Federal Government.

Mr. Mashi added that the establishment of the multidisciplinary\ training centre was the main platform upon which FIRS had implemented the reform agenda.

He also stated that the ultimate goal of FIRS in establishing the training school was to have a Tax Academy which would offer accredited tax courses to tax officers and taxpayers.

“We also intend to make the training centre available for taxpayers’ education as part of our continuous efforts to institutionalise a tax culture among Nigerians.

“It is also our intention as time goes on to make this facility available for use by other ministries, departments and agencies when available,” he said.

(NAN)

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