Taxation way out of dwindling oil revenue- El Rufai

Governor Nasir El-Rufai

By Hussaina Yakubu

Gov. Nasir El Rufai of Kaduna state has identified taxation as one of the ways to raise revenue to effectively run government and provide social services to the people.

El Rufai who made this known at the Annual Tax Conference of the Chartered Institute of Taxation on Wednesday, also raised ideas for efficient tax collection in Nigeria.

He lamented that Nigeria’s Tax to Gross Domestic Product(GDP) ratio is something in the region of 6 per cent to 7 per cent; one of the lowest in the world, compared to countries that collect up to 20 per cent of GDP.

‘’In Kaduna state with a GDP of about N2 trillion, we should be collecting about N400 billion per annum as taxation.

” Unfortunately last year, we collected slightly above N50 billion, 1/8th of what we should be collecting. That means that there is a lot of work to be done,’’ he said.

El Rufai pointed out that the situation in Kaduna state is similar to the rest of the country, adding that it is worse in most states.

The governor urged the institute to help resolve the issue of revenue collection through taxation, considering dwindling oil revenue.

“Most countries are planning for a green economy in which oil will not be used at all.

“So, we must begin to move away from oil. Oil is neither the answer nor the question that will solve our problems.

“The real solution to our problems is better and efficient taxation of goods and services.

“In the light of the fact that 75 per cent of Nigeria’s economy is informal, how do we scale up the taxation of the informal sector? I think some progress has been made with Presumptive Taxation, but it is not enough.

“Agriculture accounts for a large proportion of our GDP. Here in Kaduna state, like any state in the federation, agriculture is the largest employer of labour and the largest contributor to GDP, but it is incapable of being taxed at the farm gate.

“How do we tax agricultural production at the farm gate, not at the value-added and processing stage, so that we will be able to widen and broaden our tax net as well as proceeds,” he said.

He urged government to scale up its tax identification records so as to capture every adult in Nigeria for the purpose of taxation.