Halliru Godel, a member of the Association for the Emancipation of Rights of Small Scale Industrialists (AERSSI), has called for the modernisation of taxation system in Nigeria to fast track economic development.
Godel told the News Agency of Nigeria in Kano on Thursday that taxation would play a crucial role in the development of the Nigerian economy if properly harnessed.
“Taxation serves as a source of employment generation and innovation as well as economic consolidation, which alleviate poverty and enhance national growth.
“It is one of the factors that constitute small businesses; when a business flourishes, the economy flourishes as well,” he said.
Godel said that despite the imposition of tax regime by the government on personal income earners, companies, importers, exporters and inventors, “it is being considered as voluntary contribution and not an obligation’’.
He said that business and tax policies were interrelated, adding that if one was affected, the other would also be affected.
“An economy based on favourable and progressive tax laws and policies will definitely prop up healthy business transactions and make organisations to survive,” he said.
NAN recalls that the country currently only collects seven per cent of its GDP in tax, compared to the 20 per cent average for emerging market economies.
The government’s major source of revenue had been oil, but the collapse in prices has drained coffers underscoring the need to end the country’s reliance on the commodity.
The Chartered Institute of Taxation of Nigeria president, Olateju Somorin, stressed that the tax gap must be filled if the country is to make development progress in the face of a lack of infrastructure .
she said: “A review of some tax laws has become overdue. Sustainable economic growth cannot be attained… without the review of the obsolete laws and tax rates in consonance with macroeconomic objectives and efficient tax administration machinery.
“Our tax system must be well structured, such that the framework of tax exemptions, tax incentives and waivers are streamlined.”
A former president of the institute, Anthony Chidolue Dike, added the economy should be weaned off oil taxes with a gradual shift to indirect taxes in non-oil sectors. This would bring Nigeria’s large informal economy into the tax base, he said.