Only about 41 million people in Nigeria, pay their personal income tax, out of the country’s over 200 million population, Muhammad Nami, the Chairman of the Federal Inland Revenue Service, has disclosed.
Nami declared this at the ‘Public Presentation and Breakdown of the Highlights of the 2022 Appropriation Bill’ in Abuja on Friday, done by the Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed.
According to Nami, although this number of people pay their personal income tax, the country still earns lower than its counterparts in Africa receive from income taxes.
“If you also compare that with South Africa where they have a total population of about 60 million people, with just 4 million taxpayers, the total personal income tax paid in South Africa last year was about N13 trillion. You can now see that these things are not adding up.
“The number of billionaires in Lagos alone are more than the number of billionaires in the whole of South Africa but yet what we generated as PIT by Lagos State was low.
“So if we don’t pay these taxes, there is no way the government will be able to provide the social amenities required, the critical infrastructure required for the wellbeing of the country,” Nami said.
He said that the total collection up to Sept. 30 which has not been fully reconciled with the Central Bank of Nigeria (CBN) and the Nigerian Customs is about N4.2 trillion.
According to him, the current diversification of the economy by the government is effective as N950 billion (amounting to 22 percent of total revenue) was generated from the oil sector, while N3.3 trillion was generated from the non-oil sector.
“People are not willing to pay even when they are appointed as agents of collection, whatever they have collected they find it difficult to remit.
“We assume that we are a rich country, I don’t think that is correct, we only have the potential to be rich, because we have a very huge population of about 200 million.
“If you look at it from the rate of taxes paid in Saudi Arabia with a population of 10 million people, the VAT rate is as high as 15 percent and what we have in Nigeria is just 7.5 percent,” Nami said.
