We need not look too far, to identify one of the major reasons why Nigeria ,the biggest economy in Africa,would continue to go a borrowing, to finance her critical infrastructural needs and also pay a living wage for the citizenry,unless very bold steps are taken to turnaround the tax revenue base.

Financial Digest data analysis indicates that,with a meager Tax to GDP ratio of 6.1%,Nigeria ranks the lowest in the world,among all the top economies in six continents of the world.

In Africa,Nigeria is below Algeria(64.07%),South Africa(26.9%) and Egypt(15.8%).The United States of America has the second largest ratio in the world at 59%,behind Algeria.

Nigeria also has the lowest GDP Purchasing Power Parity at $5,861,among her global peers.

In essence,Nigeria despite a huge population estimated at 190 million,is not collecting enough in tax revenue,relying on oil as the major source of revenue.This is in sharp contrast to Algeria,which despite being a major oil producer in Africa,has the highest tax to GDP ratio of a whopping 64.07%.

Immediate and bold steps,including the deployment of technology, are required,to expand the tax net and lift the Tax/GDP ratio to at least 12%,in the short term.

With this,Nigeria would be able to operate on a financial budget of about N16 trillion ,for a starter,without need for local borrowing.



https://www.financialdigest.com.ng/blog/2019/02/04/nigerias-tax-to-gdp-ratiothe-lowest-among-global-biggest-economies/

Lies

Nigeria is cursed

Yet, Atiku of Yaounde and Obi of Beijing are planning to cut tax for billionaires and multi national companies!

Nothing new as a dullard that Does not know economy is ruling a country of 190M people that include first class economists as slaves.

A good evidence to show that the citizens too have a critical role to play in taking Nigeria to the next level.

Have you paid your tax?

Very few Nigerians pay taxes. I don't blame them though, not as if the tax money will be used for benefit of the masses.

Sirjamo:
Yet, Atiku of Yaounde and Obi of Beijing are planning to cut tax for billionaires and multi national companies!

Look at how daft someone can.. whether he is from Tokyo or Djibouti..or Obi is from Bamako or Tianjin... Nigerians has already decided

Cletus77:

Look at how daft someone can.. whether he is from Tokyo or Djibouti..or Obi is from Bamako or Tianjin... Nigerians has already decided

And by Nigerians you mean you and your fellow IPOB miscreants!

Sirjamo:
And by Nigerians you mean you and your fellow IPOB miscreants!

Everyone not supporting failure is now IPOB abi?

Sirjamo:
Yet, Atiku of Yaounde and Obi of Beijing are planning to cut tax for billionaires and multi national companies!

The tax cuts actually make fantastic economic sense.

India found out that as it lowered taxes for instance, revenue increased as tax compliance increased. What matters most is the tax base and not the tax rate.

Atiku plans to slash company taxes to the lowest in Africa. This will great fuel compliance but most importantly it will boost massive foriegn investments into Nigeria creating lots of lots and boosting economic growth. It also boosts investment by domestic investors.

China, Singapore and Ireland we're very dependent on foreign investments to get to where they are today and they all used low taxes to varying degrees to lure them in.

So, Atiku's tax reduction will greatly boost tax receipts and not reduce it as people will be readier to pay taxes than before.

Less than 1% of Nigerian companies declare their true profits. They are unprepared to give 37% (if you include 2% education tax) of their profits to the treasury. Simply increasing compliance levels to 10% will great boost government's books.

The main reason for the tax reduction is really to boost growth. Economic growth last year was a lamentable 1.81%. The country needs growth rates of 7% to create enough jobs yearly to absorb those entering the labour force yearly.

The slash in company taxes and a merger of the exchange rates should achieve economic growth rates of up to 7% yearly .

When a party like PDP governs you for 16 years this is one of the things you see. They were giving tax breaks left and centre, especially with Dr Dumbo who was not qualified to be LGA chairman. Atiku will worsen things. That one is a crook.

grandstar:


The tax cuts actually make fantastic economic sense.

India found out that as it lowered taxes for instance, revenue increased as tax compliance increased. What matters most is the tax base and not the tax rate.

Atiku plans to slash company taxes to the lowest in Africa. This will great fuel compliance but most importantly it will boost massive foriegn investments into Nigeria creating lots of lots and boosting economic growth. It also boosts investment by domestic investors.

China, Singapore and Ireland we're very dependent on foreign investments to get to where they are today and they all used low taxes to varying degrees to lure them in.

So, Atiku's tax reduction will greatly boost tax receipts and not reduce it as people will be readier to pay taxes than before.

Less than 1% of Nigerian companies declare their true profits. They are unprepared to give 37% (if you include 2% education tax) of their profits to the treasury. Simply increasing compliance levels to 10% will great boost government's books.

The main reason for the tax reduction is really to boost growth. Economic growth last year was a lamentable 1.81%. The country needs growth rates of 7% to create enough jobs yearly to absorb those entering the labour force yearly.

The slash in company taxes and a merger of the exchange rates should achieve economic growth rates of up to 7% yearly .

How is it that many African countries e.g Ghana have huge informal sectors but yet have a tax to gdp ratio of close to 20 percent or 15 percent ?

there is employment ratio

there is inflation rate

there is GDP to health benefit relief

there is GDP to higher education rate

there is level govt owned enterprises to private

owned enterprises rate

urahara:


How is it that many African countries e.g Ghana have huge informal sectors but yet have a tax to gdp ratio of close to 20 percent or 15 percent ?

Nigeria became very lazy collecting taxes because it had access to easy crude oil derived revenues.

However, countries like Ghana, with no access to such easy funding were forced to go all out and collect taxes.
That might explain things.

However, I'm not sure if the tax collection rate is reflected when we can take in the size of the informal sector.

Anyway, I need to research to reach the actual answer

Blue3k omohayek 4play please help out

grandstar:


However, I'm not sure if the tax collection rate is reflected when we can take in the size of the informal sector.

Anyway, I need to research to reach the actual answer

The tax collection rate includes informal gdp. Nigeria has very low tax to GDP rate. Its less than 10% and they manage to waste it. Here's a chart to compare other countries.