Increased tax revenue will lead to rapid economic growth in Nigeria, says FIRS

Nigerians have been urged to look at the positive contribution of taxes to the economic advancement of the country and meet their tax obligations as it provides the major source of revenue for the government to meet the infrastructural needs of the country.

Johannes Oluwatobi Wajuola, the Special Assistant on media & communications to the executive chairman, Federal Inland Revenue Service (FIRS) gave the charge at a one-day stakeholder engagement with media practitioners on FIRS tax processes held on Friday in Abuja.

He explained that the Service had automated it administrative and operational processes to boost tax revenue, adding that the stakeholders engagement was necessitated by the need to raise more awareness on how such revenue contribute positively to national development.

He explained that even when government takes a loan to fund budget deficits, such loans will be paid back with revenues generated from taxes.

Furthermore, he said there is no way government will be able to provide quality public services, such as healthcare and education, without enough revenue from taxes.

The Special Assistant said tax is a social contract between the government and the governed, saying that when citizens pay their taxes, they have legal rights to hold the government to account on how revenue from tax are spent

Earlier, the lead paper presenter, Mr. Michael Oche who is the Group News Editor, Nigerian Pilot newspapers noted that revenue generated by the FIRS has been helping federal, states and local governments to meet their day-to-day obligations.

He said although, “FAAC is however not the only source of revenue for states and the local governments as they also have internally generated revenue (IGR). Unfortunately, between 2017 and 2020, most states have not made IGR that match their FAAC revenues, which essentially means most states in Nigeria are dependent on the central pool for the running of their states.”

“Tax avoidance and evasion reduces the revenue that expected to accrue to government from a calculated number of persons already covered in the tax net. This in turn affects the economy. The country becomes cash strapped and restrained from carrying out what is expected of it for the benefits of its citizen. Then the need to borrow huge sums of money from other big nations to provide amenities amongst other things will arise. The continuous generation of low revenue hinders the country from being able to pay back her debts and the consequences fall back on the poor who depend on the Government for everything.”

Oche also delved into the various tax incentives and intervention such as the Road Infrastructure tax credit scheme, hailing it as one of the best interventions so far introduced by the current administration to accelerate the process of road construction across the country.

He also said the Higher education tax (TETFUND) which is being administered by FIRS has helped to fund numerous projects in the tertiary education system.

Speaking on the role of media in boosting tax compliance, he maintained, it is important that media highlights how taxes are spent and distributed, adding that showing taxpayers the social utility of taxes can help change their perceptions about tax, which too often emphasize the costs while dismissing the benefits.

He said, “Media report bad news at a pace that does not mirror reality, thereby discourages compliance.

“Providing taxpayers with factual information about the use of tax revenues may increase self-reporting and tax compliance. Reporting news stories basically focusing on successful public projects funded with tax revenues, reporting evidence of how tax revenues increase public welfare. Basically, when taxpayers are exposed to positive news on the use of tax revenues, they are more likely to pay their taxes correctly.”

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