Nigeria can get over $7.5bn annually from wealth tax, 99% of the wealthiest avoid or evade tax   — Oxfam

The Country Director of Oxfam International in Nigeria, John Makina, has said that implementing a progressive wealth tax could enable Nigeria to generate over $7.5 billion annually, trussing that over 99per cent of the wealthiest citizens evade or avoid tax paying

Makina  lamented: “Only 40 of the wealthiest Nigerians were found to be compliant taxpayers, according to the Federal Inland Revenue Service and John Bean Technologies Corporation. This represents a compliance rate of just 0.035%, meaning that over 99 per cent of Nigeria’s wealthiest citizens evade or avoid paying taxes.”

He made this remark at the launch of two reports by Oxfam in Abuja on Tuesday, which spotlighted the growing wealth inequality in the country.

In his address, Makina stressed the urgent need for tax reform, pointing out that while millions of Nigerians are trapped in poverty, a small elite continues to accumulate wealth without paying their fair share of taxes.

He said, “Implementing a progressive wealth tax could generate over $7.5bn annually. This revenue would be sufficient to double the government’s current health budget or reduce household out-of-pocket health expenditures by 40 per cent, significantly easing the financial burden on millions of Nigerians.”

He further explained that Nigeria’s complex tax laws and lack of transparency enable this inequality, depriving the nation of crucial revenue needed for social protection and initiatives aimed at reducing poverty.

Oxfam’s new reports, Income and Wealth Inequality in Nigeria: Trends and Drivers and Taxing the Rich: Fair Tax Monitor, expose the deepening inequality in Nigeria.

Despite being the fourth-largest economy in Africa, economic growth has largely benefited a small elite, leaving millions in poverty.

This revenue would be sufficient to double the government’s health budget or reduce household out-of-pocket health expenditures by 40 per cent, offering much-needed financial relief to millions of Nigerians.

The report also noted that Nigeria is on the brink of a financial crisis, with a large portion of the national budget allocated to debt servicing instead of funding essential public services.

Oxfam Nigeria’s Accountable Governance Programme Manager, Henry Ushie, and the lead author of the report, called for immediate reforms.

Ushie advocated for increased social spending, tax reform, and investment in human capital as solutions to reverse the current trends.

Oxfam’s recommendations for the Nigerian government include raising social sector spending to at least 10 per cent of the national budget in health, education, and agriculture, and implementing a 1 per cent wealth tax on individuals with net worths exceeding $1m.

Other recommendations include improving human capital development, supporting smallholder farmers, reforming land policies, and collaborating with civil society organisations to promote pro-poor policies.