The World Bank has advised the federal government to focus on low-hanging and revenue-yielding fruits in order to achieve substantial gains, grow Nigeria’s tax-to-GDP ratio to about seven per cent and rake in about N10 trillion revenue in the next three years.
Specifically, the bank advised the government to increase ‘sin taxes,’ charging fees for electronic money transfers, rationalizing tax expenditures, removing loopholes in tax laws, and improve tax compliance with more disciplined revenue administration.
The advice formed part of the bank’s ‘Nigeria Development Update’ released recently. The report titled: ‘Resilience through Reforms,’ noted that tax revenues were necessary to run essential services, provide security to citizens, help tackle hunger and poverty, and deliver critical health and education services.
It pointed out that Nigeria may be Africa’s biggest economy but at just four per cent, it has Africa’s lowest tax-to-GDP ratio. Furthermore, the Washington-based institution stated that the COVID-related economic slowdown and the steep fall in oil prices in 2020, brought into clear focus the need to increase non-oil revenue in Nigeria, even when investment, jobs, and growth also needed to increase.
“This calls for a carefully calibrated set of policy and administrative measures that can grow revenues without discouraging investment.
