Nigeria Is Not An Oil Economy, Nigerians Need To Pay Taxes- Kemi Adeosun.

In her article All Change, Nigeria Is Not An Oil Economy, the Minister of Finance revealed that non-compliance with tax directive was killing the economy.

In her article published yesterday, the Minister took a swing at the fairytale that many Nigerians had built for themselves about the availability of oil that guaranteed the regular flow of profit to keep the country afloat financially. She had said that it was not even fair to compare Nigeria to other countries that based their income solely on oil, she quoted for example:

“Saudi Arabia with 10 million barrels of oil per day and 30 million people, Kuwait with 2.7 million barrels of oil per day and 4 million people and Qatar with 1.5 million barrels of oil per day and 2.5 million people are typical of such. These economies pursued an economic model that was built around a large government dependent almost entirely on oil revenue for funding. Such economies could afford to have low or in some cases no domestic revenue mobilization, in the form of taxes. Tax to Gross Domestic Product (GDP) ratios of less than 10% against the OECD average of 34.6%could be justified especially in the era of high oil prices.”

But comparing them to Nigeria, she said:

“Nigeria is not actually an ‘oil economy’. With just 2 million barrels of oil per day and over 180 million people, simple mathematics tells us that 90 Nigerians share a barrel of oil compared to 3Saudis, 1.44 Kuwaitis and 1.69 Qataris. With oil at just 10% of GDP, Nigeria simply does not fit into the mould of the traditional oil economies.”

She then advised that even the countries who have more oil than we do are already seeking other ways to raise their GDP and gave the solution as payment of tax which she lamented was not being observed by many working people.

“Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active tax payers from an economically active base of 70 million. Over 95% of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20m (US$65,573.77) in 2016” she lamented in the article.

She said that the Government has a plan on hand to rectify the problem called ‘The Voluntary Asset and Income Declaration Scheme’ (VAIDS).