By Folasade Folarin
Abuja – Mr Oluseun Onigbinde, Co-Founder BudgIT, a
Civil Society Organisation (CSO) says effective taxation in Nigeria
can only be achieved with proper registration of citizens.
In an interview with the News Agency of Nigeria (NAN) on Thursday in
Abuja, he said that a lot of the nation’s wealth was lost to the
informal sector due to improper identification.
“We need to fix our taxation of the informal system and the most
important way to bridge the gap is to ensure Nigeria comes up with a
single identification system.
“It is called National Insurance in the U.K. and Social Security number
in the U.S.
“That is the only way we can come onboard and trace taxable wealth in
an effective manner.’’
He said that Nigeria’s tax to Gross Domestic Product (GDP) was worse
than some war-torn states, adding that the taxation system was not
progressive, making some rich people either pay too little or nothing
at all.
Onigbinde said that multiple taxation discourages and stifles
businesses, especially the small ones, adding that it was not just
about payment of taxes, but that the right taxes are paid.
“This is why we need progressive taxation that can only be effective
with proper citizen identification.
“We can then go ahead and revise our tax waiver system and other
approaches that embolden illicit financial flows.’’
He said that Nigeria’s Value Added Tax (VAT) at five per cent was the
lowest in Sub-Saharan Africa, adding that there was the need for a review but at a later time.
He, however, said increasing VAT during the present period when exchange rate
volatility spiked inflation was not advisable.
“This might not be the time but a 7.5 per cent to 10 per cent VAT is
worth considering in the medium term,’’ he said. (NAN)
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