The Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, on Monday said that the tax revenue ratio to the country’s Gross Domestic Product (GDP) had declined from 20 per cent to 12 per cent.
Okonjo-Iweala spoke at the inauguration of the Federal Inland Revenue Service (FIRS) Multipurpose Training School in Abuja.
She said that the county’s GDP increased from N42.3 trillion to N80.3 trillion, an increase of 89.22 per cent in 2013, which made Nigeria Africa’s largest economy.
The minister added that of the 12 per cent, non-oil revenue was four per cent and described the development as not good for the country.
She urged FIRS to redouble its efforts by improving the capacity of the staff in ensuring that the situation was reversed, while improving the revenue collection system.
“We just celebrated the fact that Nigeria has now become the largest economy in Africa with N80 trillion of GDP (509.9 billion Dollars).
“This makes us the 26th largest economy in the world and advances us on our goal to become one of the 20 largest economies in the world.
“But now with this recalculation, our revenue to GDP ratio is 12 per cent and our non-oil revenue ratio to GDP is four per cent, which means that we live worse than before.
“As you know, our revenue ratio to GDP before was 20 per cent, just about in the middle of the emerging market economy, not as good as the 22 per cent that we want to be.
“For tax revenue to GDP, we now have to redouble our efforts to get back to the 20 per cent ratio at least to where we were before,” she said.
Okonjo-Iweala expressed confidence that FIRS would rise up to the challenge and bring the country’s revenue ratio to GDP back on track with its initiative to establishing a training school.
She urged FIRS to step up Nigeria’s capacity to handle transfer pricing to address the issue of tax evasion, adding that billions of Dollars was lost every year.
“I hope that this academy will bring in experts who know how to handle transfer pricing and I know that FIRS will live up to its mandate to do more, even though it is currently doing well.
“The news I bring to you this morning is not a deterrent but an incentive to do more,” she added.
In an address of welcome, the Acting Executive Chairman of FIRS, Mr Kabir Mashi, said that capacity development was an integral part of the tax reform programme of the Federal Government.
Mashi added that the establishment of the multidisciplinary training centre was the main platform upon which FIRS had implemented the reform agenda.
He also stated that the ultimate goal of FIRS in establishing the training school was to have a Tax Academy which would offer accredited tax courses to tax officers and taxpayers.
“We also intend to make the training centre available for taxpayers’ education as part of our continuous efforts to institutionalise a tax culture among Nigerians.
“It is also our intention as time goes on to make this facility available for use by other ministries, departments and agencies when available,” he said.