The Country Director of ActionAid Nigeria, Ene Obi has estimated that 82.9 million Nigerians are currently living below the poverty line, in a largely informal economy such as Nigeria.
Obi further said in Nigeria, small and medium scale business are mainly driven by young people and women, expectedly government incentives, stimulus and credit facilities must target these biggest demography of people, in order to get the economy back on track at the earliest possible time and tackle the increasing poverty, unemployment and inequality.
At a two-day National Summit on Tax and Development in Abuja on Wednesday, Ene observed that in Nigeria and in some other African states, the tax to GDP ratio remains low.
She further said this low tax revenue trend is among the factors that necessitated the eventual Report of the High Level Panel on Illicit Financial Flows ( IFFs) from Africa that was commissioned by United Nations Economic Commission for Africa (UNECA) in 2011 and chaired by the former South Africa President, Thabo Mbeki, which estimates that more than $50b USD leaves the African shores annually.
According to her,this global economic disruption occasioned by the COVID-19 pandemic has also brought into sharper focus the impact of decades of inadequate investment in public services infrastructures, such as health and education.
She said Oil represents more than 80% of Nigeria’s exports, 30% of its banking-sector credit, and 50% of the overall government revenue, with the drop in oil prices, government revenues are expected to fall from an already low 8% of GDP in 2019 to a projected 5% in 2020.
“Consequently, the government has had to review its fiscal plan for 2020 with an increase in the initial 2020 budget of N10.594 trillion to N10.81 trillion in a revised budget despite the challenge of dwindling resources.
“ In the last one year, the government has undertaken various reforms to strengthen its tax revenue base, for instance, the Senate passed the Financial Bill which among other provisions raised Value Added Tax (VAT) from 5% – 7.5%, the CBN new directives for taxing transactions, stamp duty charges as well exploring other avenues for taxation such as taxing the digital economy amongst others.
“Within the realm of these efforts, citizens are concerned that the government’s drive for increased revenue is not taking into consideration the socio-economic conditions of the people, like the increase in food prices, fuel price hike and the increase in electricity tariff,”he said.
Also, the Vice President of Nigeria Labour Congress (NLC), Comrade Joe Ajaero who represented the NLC President, Ayuba Wabba said they are committed to all efforts to continue to demand that the Nigerian government act decisively on and around issues of tax justice , especially halting illicit financial flows , while calling on her African sister governments to do same .
He said there are no other way to achieve this than to increase the awareness level of individual citizens on the negative effects of illicit financial flows and asset theft in Nigeria.
He said it is necessary to strengthen the relationship between workers and the “other”Nigerian civil society organizations and activities in ways to continue to enrich the tax justice and halt illicit financial flows campaign.