By Saheed Ibrahim & Rukayat Fatai

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Stakeholders in the Nigerian economy have advised the federal government to leverage alternative means of generating revenue rather than burdening Nigerians with multiple and heavy taxation.

They recommended that the Nigerian government should leverage infrastructural development, focus more on harnessing numerous mineral resources, and boost agriculture.

The experts posited that there are up to 44 solid minerals in Nigeria, and every state has resources that can generate revenue.

However, illegal mining by foreign entities, such as the Chinese, is a problem that needs addressing,” they warned.

The stakeholders in separate interviews with The Hope particularly advised government to diversify the economy beyond oil and gas, optimize assets both domestic and international, and bring more people under the tax net, thereby reducing the tax burden on payers.

While pointing out that many government organisations do not remit tax to government coffers, they emphasised the need to boost local production and enhance local businesses for national and international trade.

A political economist at Adekunle Ajasin University, Akungba Akoko, Dr. Bayo Fasunwon, emphasised the importance of developing infrastructure such as roads, water distribution, and electricity, which can generate revenue from their usage.

While stating that many government-owned organizations deduct taxes on paper but fail to remit these deductions to the government, Fasunwon advocated for investment in extractive industries to boost the nation’s GDP.

He said, “another strategy that the government can look at is to go into what I call modern lending and borrowing. In our various banks, we use borrowed money to develop assets. But when the interest rate is too high and the conditions attached to taking loans are too stringent, people cannot borrow to develop their businesses and enlarge them, thereby enabling the government to generate more funds from them.

“Many industries remain slow and small because they could not generate, and when your citizens are poor, then the nation is poor.”

Dr. Fasunwon stated that the development of people, infrastructure, extraction industries, and a fair taxation system are crucial for creating an enabling environment for productivity and economic growth.

In his opinion, a scholar of Economics at Modibbo Adama University, Yola, Dr. Babalola Sikiru Jimoh, said the Nigerian government is trying to leverage strategies used in developed countries like Europe and America to grow their economies, without considering that these countries have strong institutions and infrastructure that Nigeria currently lacks.

As an alternative to heavy taxation on the citizens, Jimoh proposed promoting regional and global trade, and bilateral agreements with neighbouring countries to increase trade, foreign investment, and foreign exchange.

“If Nigeria happens to be an industrialized country, it could have succeeded in using an indirect form of tax by imposing tariffs on imported goods. By doing that, it will discourage importation and grant tax relief to the local industries to grow the economy.

“In a nutshell, the Nigerian government is just trying to use the shortcut to raise revenue without actually growing the economy or developing the industrial base of Nigeria. So we can promote locally produced goods that can easily be exported to those countries, and Nigeria can earn more foreign exchange,” he explained.”

Jimoh further recommended that savings from fuel subsidy removal should be invested in other productive sectors like the agricultural sector to boost the economy, as advised by the World Bank.

Another economic expert, Elder Fessy Olabode, charged the Nigerian government to leverage infrastructural development, harness mineral resources, and boost agriculture to generate more revenue rather than overtaxing Nigerians.

Olabode also said that the government must diversify the economy beyond oil and gas and optimize assets, both domestic and international, to generate more revenue, stressing that Nigeria has more people outside the tax net, leading to multiple and heavy taxation on some Nigerians over others.

“The fact is that the tax net needs to be expanded. This means bringing in more people to pay tax because currently, very few people pay the actual tax. By increasing the number of taxpayers, we can increase revenue from taxes.

“When we look at various types of taxes, it’s not intended to punish people but to increase revenue, as Nigeria’s tax response is one of the lowest in the world. However, taxation is not the best way to bring in revenue at this moment because the economy is hard.”

He further noted that natural resources are another potential sources of revenue, stating, “Nigeria has many minerals, such as bitumen in Agbabu, but they are not mined appropriately. If the government takes mining seriously, we can make significant revenue.

While saying that agriculture holds vast potential for revenue generation, he advocated for a shift from subsistence farming to mechanized agriculture to increase productivity and create a surplus for export.

On his part, an economist, Professor Timothy Awe, however, noted that tax system has various functions, including revenue generation, regulation, social welfare, supervision, and promoting competitiveness.

“Overall, the purpose of taxes is to fund public needs, promote economic stability, and ensure a fair distribution of resources within society. Collecting taxes is a fundamental way for countries around the globe (Nigeria inclusive) to generate public revenues that make it possible to finance investments in human capital, infrastructure, and the provision of services for citizens and businesses.

“Tax collection is primarily to raise revenue for government expenditures, although they serve other purposes as well,” Awe added.

According to the World Bank, tax play a key role in making growth sustainable and equitable, especially in the context of current external disruptions and domestic structural problems led by widespread insecurity, runaway inflation, high cost of living and dwindling crude oil revenue.

It was argued that without taxes, governments would be unable to meet the demands of their societies. Taxes are crucial because governments collect this money and use it to finance social projects.

Meanwhile, a public opinion expert, Dr Emmanuel Adenegan has argued that much of government financing gap can only be met by increased private-sector investment in sustainability.

“Taxes are used for payment of salaries of public servants, procurement of security weapons for the protection of lives and property; provision of basic and social amenities including roads, power, clean water, effective and affordable health system and provision of quality education.

“In Nigeria, when taxes are collected from both individuals and organisations by the Federal Inland Revenue Service (FIRS) on behalf of the federal government, they are remitted into a central account of the Federation Account Allocation Committee (FAAC) for monthly disbursement to the federal, state and local governments. That is a major source of revenue to the three tiers of government for payment of recurrent and capital expenses.”

They explained that government should provide adequate power supply and conducive environment for private sector so that it will reduce their production cost hence, scale up profit which invariably will increase revenue from profit income tax.