Billionaire and co-founder of Microsoft, Bill Gates, has commented that tax collection in Nigeria is low. He said this during a Pan-African youth dialogue on nutrition in Abuja on Tuesday.
The American business magnate is reportedly in Nigeria for a series of events.Speaking at the event, Gates mentioned that the low tax collection in Nigeria poses a great challenge to adequate financing of critical sectors such as health and education.
He also said that full commitment on managing the funding of health programmes will encourage the confidence of citizens in the government’s ability to deliver quality healthcare.
Bill Gates said, “Over time, there are plans for Nigeria to fund the government more than it does today. The actual tax collection in Nigeria is actually pretty low.
“If citizens want the education and the health things, as they develop the confidence that these programmes can be very well run, and our foundation is involved with a lot of the exemplars that are showing the way in terms of making sure the money is spent really well, running a very efficient primary health care system where the employees are doing great work, the centres are where they should be, you don’t have underloaded centres or overloaded centres.
“It’s exciting that we are driving the credibility of those health programmes so that the citizens will feel like primary health care is amongst the priorities that should be very funded as you get some fiscal flexibility.”
Gates’ remarks comes after Taiwo Oyedele, the Chairman, Presidential Fiscal Policy and Tax Reforms Committee, mentioned on Channels TV that his committee is proposing a law to the National Assembly to increase value added tax from the current 7.5% to 10%.
He said, “We have significant issues in our tax revenue. We have issues of revenue generally which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.
“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, coordination within the federal government and across sub-national.
“The second one was revenue transformation. The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.
“The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.
“While we are doing that, we have a corresponding reduction in personal income tax. Anybody that is earning about N1.5 million a month or less, they will see their personal income tax come down. Companies will have income tax rate come down by 30% over the next two years to 25%. That is a significant reduction.
“Other taxes they pay are quite many: IT levy, education tax, etc. All these we are consolidating into a single one. They will pay 4% initially. That will go down to 2% in the next few years.”
Unfortunately for Nigerians, increasing tax means more expenses and hardship for them. The issue remains how well Nigeria’s tax monies are managed.
