Only 14m nigerians pay tax firs
A very interesting and concerning statistic!
According to the Federal Inland Revenue Service (FIRS) in Nigeria, only about 14 million out of a population of over 200 million Nigerians pay taxes. This means that a staggering 86% of the population does not pay taxes.
This low tax compliance rate is a significant challenge for the Nigerian government, as it affects the country's ability to generate revenue and fund public goods and services. The government relies heavily on oil revenues, which are subject to fluctuations in global oil prices, making it difficult to plan and budget for the future.
The reasons for this low tax compliance rate are varied, but some of the key factors include:
- Limited awareness about tax obligations: Many Nigerians are not aware of their tax obligations or do not understand the tax laws and regulations.
- Lack of trust in the tax system: Some individuals may not trust the tax system or believe that their taxes will not be used effectively.
- Limited access to financial services: Many Nigerians, particularly in rural areas, do not have access to formal financial services, making it difficult for them to pay taxes.
- Corruption: Corruption and bribery can also contribute to low tax compliance, as some individuals may be reluctant to pay taxes if they believe that they will be asked to bribe tax officials.
To address this issue, the Nigerian government has implemented various initiatives, including:
- Simplifying the tax system: The government has introduced a simplified tax system, making it easier for individuals and businesses to comply with tax laws.
- Increasing tax education and awareness: The government has launched public awareness campaigns to educate Nigerians about their tax obligations and the importance of tax compliance.
- Improving tax administration: The government has implemented measures to improve the efficiency and effectiveness of tax administration, including the use of technology to streamline tax collection and reduce corruption.
- Increasing tax incentives: The government has introduced tax incentives to encourage individuals and businesses to comply with tax laws, such as reduced tax rates for small businesses and individuals.
Overall, addressing the low tax compliance rate in Nigeria will require a combination of these initiatives, as well as a sustained effort to build trust in the tax system and improve access to financial services.