[EDITORIAL] Clamping down on wealthy tax evaders
Like its predecessors, the Maj.-Gen. Muhammadu Buhari regime is careless with tax administration and the criminality of tax evasion. Although it needs huge revenue to service its rising recurrent expenditure, debts and infrastructural deficit, Nigeria is unable to collect trillions of naira owed by tax defaulters. In a fresh insight, a former Director-General of the Budget Office, Bode Agusto, identifies low tax compliance among the wealthy as a major impediment to the country’s economic growth.
Whichever way, all the rates are just too abysmal, and portend a perilous future. The World Bank posits that for any economy to achieve growth and reduce poverty, it requires a minimum tax-to-GDP ratio of 15 per cent. At this low rate, Nigeria is unable to meet its revenue projections and resorts to reckless borrowing.
In this respect, it launched an amnesty project – the Voluntary Assets Income Declaration Scheme – in 2017. Defaulters were given a window to pay up and escape prosecution. It failed woefully: only 8.0 per cent defaulters utilised the opportunity. At that time, the then Minister of Finance, Kemi Adeosun, said only 226 defaulters accounted for N20 billion of the amount realised from VAIDS.
All along, the government’s cluelessness has been evident. Just 20 wealthy Nigerians and big corporations owe the Asset Management Company of Nigeria 67 per cent of the N5 trillion debts on its books. These dodgers own visible assets within and outside the country, but irrationally, government dances around the issue. It cannot collect Value Added Tax revenue, which it has just increased from five per cent to 7.5 per cent. This hurts the economy.
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