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Thursday, December 8, 2022

Expanding Government Revenue

GOVERNMENTS all over the world in contemporary times carry out a number of activities concerned with the development and improvement of welfare and prosperity of the citizenry. These activities require  lot of resources which government derives from several sources of which the most prominent is taxation in different forms.

         HOWEVER, the resources and funds available to government at all levels in Nigeria are dwindling over the years in the face of rising needs to provide more sufficient infrastructure and basic services such as education, health, transportation, water supply, energy and power among others. This has been exacerbated by rapid increase in the population of the country which United Nations estimated at over million in July 2022.In addition, the national budget of the country has risen from about N4.88 trillion  in 2012 to about N20,5 trillion in 2023 proposals.

WHAT all these imply is a need and call to expand the revenues of the government so as to be able to cope with the multifarious needs of the growing population of the country especially the teaming army of the youth population that requires education, health, housing and other essential things of life that make for good living. This has become a source of concern to many Nigerians and governments, hence the need to seek ways and means to improve revenues accruable to governments in the country so that they can function well and meet the needs of the populace. . 

IN general, the major sources of revenue to governments are Individual income taxes, small businesses and corporate  taxes, exercise, estate and other forms of taxes and fees. Others are income from investments like rent, interest, dividends, and capital gains. Individual taxes are the largest single source of revenues to government in  most climes and many governments have explored this source to the benefits of their people. In Nigeria, a substantial part of the revenue of the Federal, State and Local Government of Nigeria is realised from taxation but there’s more to government earnings than just taxation.

 HOWEVER, taxation has provided reasonable revenue for government in recent times. For instance, it was revealed that the significant increase in revenues from N415.7 billion in April to N462.4 billion naira ($1.43 billion) in May 2017 was as a result of proceeds from corporate taxes.

HOWEVER, it has been noted that majority of Nigerians especially in the private sector don’t pay taxes, it is only those in the public sector that really pay taxes. Therefore, government must devise better methods of pooling more people and sources into the  net because a lot of revenue is lost by not collecting them.

THIS is essential because available records indicate that there are just 2.5 million tax-registered corporate bodies  while there are 30 million on the Corporate Affairs Commision’s list. Efforts must be made to expand government revenue by ensuring that all corporate oerganisations are made to pay taxes instead of relying on crude oil exploits that have been the main source of revenue to governments in the country,.

REGRETTABLY, and sadly is  that a lot of revenues that should accrue to government end in private hands because of corruption and many under cuttings are carried out by corporate bodies with  the connivance of   tax officials. Therefore, government must put in place pragmatic and corruption free strategies of obtaining taxes from the society to eliminate loopholes for stealing government revenue. To encourage citizens to continue to be faithful in paying taxes, government must be responsible, responsive and accountable in utilizing revenue accruable to them.

ALSO, .government must improve on the ease of doing business and create enabling environment for businesses to flourish. This can be achieved by enacting laws to aid, promote and enhance industrialization in the country. A situation where many hitherto viable industries fold up or relocate to neighbouring countries due to lack of basic infrastructural needs  cannot help in expanding incomes accruable to government. The laws of taxation need to be improved upon and made functional so that tax evaders are dealt with according to laws and best practices.

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