Effective taxation achievable with proper registration of citizens – CSO

Mr Oluseun Onigbinde, Co-Founder BudgIT, a Civil Society Organisation (CSO) has said that effective taxation in Nigeria
can only be achieved with proper registration of citizens.

In an interview with newsmen on Thursday in Abuja, he said that a lot of the nation’s wealth was lost to the informal sector due to improper identification.

“We need to fix our taxation of the informal system and the most important way to bridge the gap is to ensure Nigeria comes up with a single identification system.

“It is called National Insurance in the U.K. and Social Security number in the U.S.

“That is the only way we can come onboard and trace taxable wealth in an effective manner.’’

He said that Nigeria’s tax to Gross Domestic Product (GDP) was worse than some war-torn states, adding that the taxation system was not progressive, making some rich people either pay too little or nothing
at all.

Onigbinde said that multiple taxation discourages and stifles businesses, especially the small ones, adding that it was not just about payment of taxes, but that the right taxes are paid.

“This is why we need progressive taxation that can only be effective with proper citizen identification.

“We can then go ahead and revise our tax waiver system and other approaches that embolden illicit financial flows.’’

He said that Nigeria’s Value Added Tax (VAT) at five per cent was the lowest in Sub-Saharan Africa, adding that there was the need for a review but at a later time.

He, however, said increasing VAT during the present period when exchange rate volatility spiked inflation was not advisable.

“This might not be the time but a 7.5 per cent to 10 per cent VAT is worth considering in the medium term,’’ he said.

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