The Debt Management Office has expressed worry over what it describes as the country’s low comparative tax revenue to Gross Domestic Product ratio.
The agency reiterated the need for the government to the widen the scope and ensure effective tax administration compliance in the country.
It said the country’s tax revenue to the GDP ratio was less than seven per cent, while the average taxation required by the government to create maximum value for the economy was 30 per cent.
The Director-General, DMO, Dr. Abraham Nwankwo, who said these at a workshop in Lagos on Tuesday, added, “The nation’s current tax percentage is relatively very low, when compared to 18 per cent achieved by other developing countries.”
He noted that the nation’s debt and economic sustainability could be influenced by individuals and corporate bodies complying fully with tax payment regulations going by the huge population of the country.
“There must be effective tax administration compliance in running the economy. All over the world, government depends optimally on taxation to run the economy. Going by our population, Nigeria should not find it difficult undertaking huge projects. We should not have problem reviving the infrastructure. The minimum we should do is 18 per cent like that of our peers,” the DMO boss added.
Speaking on the recently signed budget, Nwankwo restated that the Federal Government would utilise all money to be borrowed to finance the budget, while funding capital projects.
“The DMO is committed to making sure that we raise money to fund the 2016 budget deficit from appropriate sources and through appropriate mix during the fiscal year to make sure that capital projects are funded,” he said.