Tax revenue contributes less than 7% to GDP-DMO

Niyi Jacobs

The Director-General, Debt Management Office (DMO), Dr. Abraham Nwankwo, disclosed that the nation’s tax revenue rate to the Nigeria Gross Domestic Product (GDP) is less than 7 percent.

Speaking at the breakfast meeting for business editors and investment journalists organized by the DMO over the weekend, Nwankwo, noted that the revenue income from taxation of any country should not be less than 18 percent, while Nigeria has not effectively utilizes the potentials hidden in the taxation revenue.

The DMO boss identified better tax structure and compliance, couple with appropriate charges and fine for non-compliance, will help the government to generate more income, so as to sustain the Nigerian economy with effective taxation.

He added, “Taxation is one of the strong means of generating income for the government instead of solely focusing on the oil sector like Nigeria is doing.”  He maintained that the country needs to be among the top 20 greatest countries in the world.

Nwankwo explained that oil sector has only contributed 20 percent to Nigeria GDP; in which other sector contributes the rest of the income, adding that taxation is the key to structuring of any country’s economy.

According to him, Nigeria needs to look away from the depressing state of the oil price, because there is no need to be worry. “We need to appreciate some of the opportunities in all these challenges and therefore, in seeing how to respond to it. It is the critical factor which could be in the right or wrong result to our economy or society”, he added.

Nwankwo also highlighted that for many stakeholders, the collapse of the oil price in 2014 has become a depressing issue for a couple of reasons. He said that the nation need to be reminded of the fact that its economy was not supposed to be depending on oil revenue. He said that though, historically  the sector have been helping the nation but over the past 3 years oil  sector has  only contributed  little above more than 20 percent across  to the GDP.

“The pillars that hold our economy are not oil sector because those other segments that contribute about 80 percent are still there for us to use,” he stressed.

While highlighting other sectors that could be tapped into, he pointed out that sector like manufacturing, agriculture and the entertainment like Nollyhood and musical industry , with a strong bases that have built establishment with the privatization of the ICT sector.

“Luckily for Nigeria, we still have those other entire alternative, and we have not explored up to 25 percent in the agriculture sector, in fact we have capacity to export. We have the variety of crops, cash crops food crops etc, and there in thousands, all this belong to this country Nigeria,” he explained.