The Minister of Finance, Mrs. Kemi Adeosun, has said that the nation’s tax to Gross Domestic Product ratio, which is currently put at six per cent, is one of the lowest in the world.
She said with such a ratio, which is less than the 15 per cent for Ghana, there was no way the country could generate enough non-oil revenue to enable the government to implement its programmes.
Adeosun, according to a statement issued by the Director of Information in the Ministry of Finance, Salisu Dambatta, stated this in a presentation made at The Platform in Lagos on Tuesday.
She said the administration of President Muhammadu Buhari was building a productive Nigerian economy for a sustainable and inclusive economic growth.
The minister stated that the Federal Government was calling for greater focus on the productive sectors of the economy to drive inclusive and sustainable economic growth in the country.
Adeosun said while mistakes had been made in the past, the Buhari administration was looking ahead and laying the ground work to build a resilient economy that was not vulnerable to oil volatility.
She said, “While oil proceeds have represented between 50 per cent and 70 per cent of the Federal Government revenue over the past three years, it has contributed 10 per cent or less to the Gross Domestic Product in the same period.
“We must change our growth model to deliver inclusive and sustainable growth by broadening the range of our economic activities in the production and distribution of goods and services.
“We have an unacceptably low level of non-oil revenue and much of that is driven by a failure to collect tax revenues. With a tax to GDP ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth.”
The minister said the focus of the government this year was to improve tax revenue through ensuring voluntary compliance with tax laws.
Adeosun added, “We are going to focus on tax in 2017. We will improve our tax to GDP ratio, block leakages and increase compliance.
“We will also introduce taxes on luxury items and excise duties on tobacco and alcohol.”