Less than 30% Nigerians pay tax but 100% want good infrastructure – Akpabio

From Adesuwa Tsan, Abuja

Senate President, Godswill Akpabio, has berated Nigerians for demanding infrastructure such as good roads and trains when only less than 30 percent of them pay their taxes.

He, therefore, stressed the need for urgent reforms to modernise the country’s tax system to enhance revenue generation and collection for infrastructural development across the country.

He spoke at the beginning of a two-day public hearing organised by the Senate Committee on Finance on the proposed four tax reform bills in Abuja, yesterday.

The four Bills are the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill 2024, the Nigeria Revenue Service Establishment Bill 2024 and the Joint Revenue Board Establishment Bills 2024.

Akpabio stated: “I don’t think at the moment that up to 30 percent of Nigerians pay tax. Yet, 100 percent of Nigerians want good roads. They want culverts, they will like dualised thoroughfares, they will like trains. They will like skyscrapers, they want Nigeria to be modernised in a hurry. Those things need money but I know Nigerians will not want to pay taxes.

“So, I know that at the end of what we are doing, it will be easy for you to pay tax whether you like it or not. Then, we will now oversee the government to ensure that whatever revenue comes into the purse of the government is well-utilised through proper oversight functions.

“Nigerians don’t pay tax. Many either evade taxes completely or struggle under multiple layers of taxation that discourage compliance.”

The Senate President emphasised that taxation should not be a burden, hence the need for a structured system that benefits both the government and the people.

“The challenge before us goes beyond simply passing new laws. We must construct a tax system that inspires confidence, promotes development and drives national growth,” he said.

Akpabio noted that some of Nigeria’s tax laws date back to colonial times and require urgent modernisation. “Some of our tax laws are outdated and no longer fit our current economic realities. We need a system that is fair, transparent and efficient,” he added.

Another major concern, he added, is the imbalance in tax revenue distribution. He cited instances where companies operate in one state but remit taxes in another, depriving host communities of needed resources.

“For example, if a brewery operates in Ogun State but its headquarters is in Lagos, the tax revenue is collected in Lagos while Ogun, the host state, gets little or nothing. This must be addressed to ensure fairness in revenue allocation,” he explained.

He said the public hearing represents more than a legislative requirement, saying that it was a call to collective action.

According to him, public hearing is a platform for dialogue, where lawmakers, tax administrators, businesses operators and citizens come together to craft a fair, transparent and effective tax regime that reflects the interests of all.

He said the four bills sought to harmonise revenue administration across all tiers of government.

“The bills seek to reduce the cost of tax collection and enhance compliance, foster transparency, accountability and efficiency in tax administration.”

According to him, the bill will introduce digital innovations to simplify tax payments and close loopholes, while ensuring fairness, protecting vulnerable taxpayers and creating an environment ripe for economic growth.

“We cannot afford to be fragmented in our approach to revenue generation, instead, we must come together, as federal, state and local governments, alongside the private sector and civil society to create a tax system that truly works for all.”

He said the 10th National Assembly was fully committed to enacting legislative reforms that would strengthen the nation’s economic foundation, empower businesses and enhance accountability within the government.

“The success of this public hearing hinges on your active engagement and I encourage all stakeholders to contribute meaningfully to this dialogue.

“Let us use this moment, not just for ourselves, but for future generations, to lay the foundation for a stronger, more resilient and prosperous Nigeria.”

The tax reform bills under consideration, he said, aim to simplify compliance, reduce bureaucracy and foster economic growth. Akpabio urged stakeholders to engage constructively and submit well-researched recommendations rather than relying on social media opinions.

“We all agree that reform is necessary, so bring your ideas to the table. Five years from now, we want to look back and say, yes, thanks to the National Assembly, we have built a better tax system,” he stated.

The public hearing attended by top government officials, including the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, business leaders, and civil society groups, is part of the ongoing legislative efforts to overhaul Nigeria’s tax framework.

Stakeholders, including the Nigerian National Petroleum Company Limited (NNPCL), Revenue Mobilisation and Fiscal Allocation Commission (RMFAC) also expressed support for the Bills.

In his submission, Group Chief Executive Officer of NNPCL, Mele Kyari, said that the entire oil and gas industry was happy with the bills.

“We are the happiest people to see this tax law coming into place, bringing every education in one basket.

“And bringing in a significant number of reforms that will bring simplicity to the tax system and the tax laws in our county.

” And I want to tell you, you know, making our business more profitable, we have a plan to keep our industry as strong as possible, multiple tax systems, multiple tax rules.

Also speaking, Chairman of Revenue Mobilisation and Fiscal Allocation Commission (RMFAC), Dr Mohammed Shehu, said that the commission was in support of the bills 100 per cent, adding that the bills would enhance stability in the economy.

He urged the Senate Committee on Finance to address the area of bad distribution to sub-nationals.

“I hope that this bill will address the issue of endless reconciliation with NNPC.”

The Convener, Arewa Think Thank, Muhammad Yakubu, said the group was one of the groups that saw the benefits of the bills.

“We  analysed the benefits of the bills and made our position known and we have submitted same.

“The perception that the North is against the bill is not true. And please, some of these views that are very very important to the country should not be put aside,” he said.

The representative of the Supreme Council for Sharia in Nigeria, Ahmad Dogarawa, said it was the view of the Supreme Council for Sharia in Nigeria that the Nigerian tax system was indeed in need of reform.

“We, therefore, commend the government for its genuine efforts to reform our tax system.

“However, the Council wishes to bring the attention of the National Assembly to the following concerns of the specific sections of the Nigerian tax bill and the Nigerian tax administration bill.

“We have suggested that the Value Added Tax (VAT) be reviewed to five per cent or to maintain the present 7.5 per cent.”

Earlier in his speech, Chairman of the Senate Committee on Finance, Mohammed Sani Musa, emphasised that the outcome of Nigeria’s tax reform bills will be shaped by contributions from stakeholders, thereby ensuring an inclusive and transparent legislative process.

He stressed the importance of diverse perspectives in crafting a fair and efficient tax system, saying, “The success of these reforms will depend on the input of all stakeholders, businesses, tax professionals, civil society organisations and the general public. We must work together to create a tax system that is transparent, predictable and supportive of economic growth.”

The lawmaker equally highlighted that many existing tax laws are outdated and require urgent modernisation. “These reforms are not just about taxation; they are about building a fairer, more efficient and growth-oriented tax system that supports businesses, encourages investment and ultimately improves the lives of Nigerians.”

He outlined the key objectives of the bills, which include updating tax laws, improving revenue collection, streamlining tax administration and ensuring fairness in the system.

“A fair and efficient tax system is essential for economic growth. These bills aim to enhance revenue generation, make compliance easier for businesses and individuals and prevent excessive taxation,” he stated.

He acknowledged concerns about marginalisation in revenue distribution and possible biases in tax administration but assured stakeholders that the process would be inclusive and transparent.

“Our goal is to develop a tax framework that promotes economic prosperity, encourages investment and strengthens Nigeria’s fiscal sustainability. We will ensure that every voice is heard, and the final laws will serve the best interests of all Nigerians,” he assured.

The chairman urged participants at the hearing to engage constructively and provide well-researched recommendations.

“The outcome of this process should not only be acceptable to all but should also pave the way for a more robust, efficient, and fair tax system that contributes to a stronger and more prosperous Nigeria,” he concluded.

In his submission, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the proposed tax reforms would build on the progress made under President Bola  Tinubu’s economic agenda, ensuring sustainable growth and fiscal stability.

Edun described the reforms as a necessary step to modernising Nigeria’s tax system in line with the country’s economic trajectory.

“This reform is part of Mr. President’s economic agenda. It is a bold step, another bold step, because we are all privy to the reforms that have been made over the last 20 months or so,” he said.

He listed some key economic improvements under Tinubu’s administration, noting, “We can all see the progress that has been made. The economy is growing, reserves are increasing, inflation is stabilising and the budget deficit is under control, particularly in relation to food prices.”

According to Edun, the tax reforms aim to enhance compliance, broaden the tax base and foster an environment that attracts investment and job creation.

“As the economy grows, we must modernise our tax laws. These reforms will create equity, efficiency and economic growth,” he stated.

He emphasised the importance of public engagement in shaping the tax laws, saying the hearing was crucial for gathering stakeholders’ feedback.

“Critically, today’s sitting is about ensuring that all views are heard and that all stakeholders are carried along. This is the essence of the reform process,” he added.

However, a council member of the Chartered Institute of Taxation of Nigeria (CITN), Prof. Aminu Makaila, opposed the empowerment of the Joint Tax Board to choose tax collection agents in the bill. He noted that this usurps its role as the body in charge of tax agents in the country.

The event was attended by some revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Nigerian National Petroleum Company Limited (NNPCL).

Others are Nigerian Immigration Service (NIS), tax related NGOs and associations, among other organisations.