With over 82.9million Nigerians currently living below the poverty line, there is a need to urgently tackle poverty to get the economy back on track, according to ActionAid Nigeria.
The Country Director, Actionaid, Ene Obi, also said unemployment and inequality, government incentives, stimulus and credit facilities must be targeted at small and medium scale business mainly driven by young people and women, as other quick intervention areas.
At a two-day National Summit on Tax and Development, in Abuja, on Wednesday, Obi observed that the tax-to-Gross Domestic Product ratio remains low in Nigeria, as in many other African states.
She further said this low tax revenue trend is among the factors that necessitated the eventual Report of the High Level Panel on Illicit Financial Flows (IFFs) from Africa that was commissioned by United Nations Economic Commission for Africa (UNECA) in 2011.
The panel, chaired by the former South Africa’s President, Thabo Mbeki, estimated that more than $50billion leaves the African shores annually.
According to Obi, the global economic disruption occasioned by the COVID-19 pandemic has brought into sharper focus the impact of decades of inadequate investment in public services infrastructure, such as health and education.
She noted that with oil representing more than 80% of Nigeria’s exports, 30% of its banking-sector credit, and 50% of the overall government revenue, with the drop in oil prices, revenues are expected to fall from an already low 8% of GDP in 2019, to a projected 5% in 2020.
“Consequently, the government has had to review its fiscal plan for 2020, with an increase in the initial 2020 budget of N10.594 trillion to N10.81 trillion in a revised budget despite the challenge of dwindling resources.
“In the last one year, the government has undertaken various reforms to strengthen its tax revenue base. For instance, the Senate passed the Finance Bill which among other provisions raised Value Added Tax (VAT) from 5% – 7.5%, the CBN’s new directives for taxing transactions, stamp duty charges as well exploring other avenues for taxation such as taxing the digital economy.
“Within the realm of these efforts, citizens are concerned that the government’s drive for increased revenue is not taking into consideration the socio-economic conditions of the people, like the increase in food prices, fuel price hike and the increase in electricity tariff,” she said.
Also, the President, Nigeria Labour Congress (NLC), Ayuba Wabba, represented by his Vice, Joe Ajaero, expressed the movement’s commitment to all efforts by the Nigerian government to act decisively on issues of tax justice, especially halting illicit financial flows, while calling on other African governments to do the same.
He said there is no other way to achieve this than to increase the awareness level of individual citizens on the negative effects of illicit financial flows and asset theft in Nigeria.
He said it is necessary to strengthen the relationship between workers and civil society organizations and their activities in ways that will continue to enrich tax justice and halt illicit financial flows.
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