President of African Development Bank, Akinwunmi Adesina says the Nigerian government can’t justify its increment of taxes.
Adesina said the Nigerian government cannot compare itself with other countries of the world in taxation, as it has not provided basic amenities and necessities for the people to live better lives.
The Nigerian government recorded a 6.1% GDP-to-tax ratio and is looking on increasing this through taxing Nigerians more.
Akinwunmi said this is not justifiable as residents may be subjected to a double whammy of excessive taxation and inadequate amenities.
The AfDB boss said on Tuesday in Abuja while he delivered a lecture at the annual conference of the Institute of Chartered Accountants of Nigeria (ICAN) with the theme ‘Trust in Governance’.
Akinwunmi said; “While tax rates are relatively low in Nigeria, it simply is not an excuse to keep increasing taxes.”
“Take the case of Norway for example. Its tax-to-GDP ratio is 39 percent. Singapore’s tax-to-GDP ratio is 13.2 percent. And Nigeria’s tax-to-GDP is 6.1 percent. It is easy to make the comparison and say Nigeria needs to raise its taxes to similar levels as in Norway or Singapore.
“But also consider the following – In Norway, education is free through university. Singapore, a country that had only 1/3 of Nigeria’s per capita income at its independence in 1965, today has 100 percent access to electricity and 100 percent access to water.”
“While progress is being made, the challenge, however, is that in many parts of Nigeria, citizens do not have access to basic services that governments should be providing as part of the social contract.”
“People sink their private boreholes to get water. They generate their own electricity often times with diesel. They build roads to their neighbourhoods. They provide security services themselves.”
“These are implicit taxes, borne by society due to either inefficient government or government failure. As such, we must distinguish between nominal taxes and implicit taxes — taxes that are borne by the people but are not seen nor recorded.
“It has become so common that we do not even bother to question it. But the fact is governments can simply transfer its responsibility to citizens without being held accountable for its social contract obligations.”
Although Nigeria has recorded reduced inflation in successive months, the prices of commodities are still flying high in the market amid a sharp reduction in household remittances.