Leadership (Abuja)

16 May 2014

Nigeria: 65 Percent of Corporate Citizens Don't Pay Tax - Okonjo-Iweala

A recent diagnostic study of the country's tax administration conduct by McKinsey &Company has shown that 65 per cent of eligible corporate tax payers, especially from the non-oil sector, are not filing returns to the Federal Inland Revenue Service (FIRS).

The minister of finance and coordinating minister of the economy, Mrs Ngozi Okonjo-Iweala, stated this yesterday at the FIRS Stakeholders Engagement Forum held in Lagos.

The minister who presented a keynote address at the event noted that the forum was being held on the heels of the successful hosting of the World Economic Forum on Africa (WEFA) by Nigeria, remarking that the Nigerian edition of the WEFA attracted 1,021 global participants, the highest attendance by any WEF, outside Davos; the headquarters of the forum.

She noted that there was a huge turnout by the international community because of the underlying strength of the Nigerian economy, remarking that the underlying strength of the Nigerian economy is not the oil sector but the non-oil sector.

Okonjo-Iweala explained that the recent rebasing of the country's gross domestic product (GDP) has also shown that tax contribution to the new GDP has fallen from 20 per cent to 12 per cent and there was need to step up to the plate in order to increase the country's tax to GDP ratio and ratio of oil to non-oil tax collection from the present level in line with the level of other emerging economies of the world.

She noted that the engagement of McKinsey, who provided technical assistance in implementing a Capacity Enhancement Programme (CEP) for the FIRS, has made the FIRS to embark on eight new initiatives in the areas of audits, arrears and debt enforcement, tax exemptions, evasion, registration, filing and improved communication, adding that the FIRS has already begun to see results from the implementation of these initiatives.

She said that one of the positive outcomes of the reforms in the FIRS is the recent payment of about N200 billion income tax by the Nigerian Liquefied Natural Gas (NLNG), which has been enjoying tax holidays to the FIRS.

In his welcome address, the acting executive chairman of the FIRS, Kabir Mashi, said the stakeholders' engagement forum is an initiative that flows out of their CEP which is a project designed to enhance the technical and human resource capabilities of FIRS towards improving non-oil revenue collection.

He said the forum is to reassure taxpayers that FIRS appreciate their efforts in contributing to national development over the years by paying their taxes.

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