American business magnate and co-founder of Microsoft, Bill Gates, has drawn attention to Nigeria’s low tax collection rate, describing it as a significant challenge to the country’s ability to finance critical sectors like health and education.
Gates made this assertion during a Pan-African youth dialogue on nutrition held in Abuja on Tuesday, where he emphasized the need for Nigeria to bolster its tax revenue to improve its fiscal health and invest more effectively in public services.
While addressing the gathering, Gates highlighted that the country’s current tax collection rate is insufficient for meeting the essential needs of its citizens, especially in healthcare. According to him, for citizens to develop confidence in the government’s ability to provide quality healthcare, it is crucial that there be a clear commitment to managing health funding responsibly and efficiently.
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“Over time, there are plans for Nigeria to fund the government more than it does today. The actual tax collection in Nigeria is pretty low,” Gates said.
He further elaborated that as confidence grows in how well government programs, such as primary healthcare, are run, there will be more support for increasing funding through taxation.
“It’s exciting that we are driving the credibility of those health programs. Citizens will feel like primary healthcare is among the priorities that should be well funded as you gain fiscal flexibility,” Gates added.
Gates’ remarks on Nigeria’s fiscal capacity came shortly after Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, outlined his committee’s proposals aimed at easing the economic burden on Nigerians. In his statement, Oyedele revealed that the committee recommends the removal of taxes on essential goods and services, including food, public transportation, and housing.
The proposed measures are designed to alleviate the economic pressure on low- and middle-income Nigerians, who have been hardest hit by rising inflation and the removal of fuel subsidies. Oyedele highlighted that the tax reforms focus on exempting basic necessities from taxation, particularly by removing Value-Added Tax (VAT) on items essential for everyday living.
“We’ve identified food, accommodation, transportation, education, and health as critical areas of life, and we’ve removed almost all taxes, including VAT, on these items,” Oyedele explained.
The goal is to create a more manageable cost of living for Nigerians, especially those struggling with the increasing cost of basic goods and services.
However, this sentiment from Gates echoes long-standing calls from the International Monetary Fund (IMF) for Nigeria to increase its tax revenue. The IMF has consistently pointed out that Nigeria’s tax-to-GDP ratio, which hovers around 6%, is one of the lowest in the world. Comparatively, the average tax-to-GDP ratio in sub-Saharan Africa is around 17%, while in advanced economies, it is much higher.
The IMF has argued that without addressing this shortfall, Nigeria will struggle to meet its budgetary needs, fund development projects, or reduce its heavy reliance on borrowing.
However, the IMF’s recommendations have faced widespread opposition in Nigeria. This is because economic hardship has severely affected earnings across various sectors of the economy. The removal of fuel subsidies, rising inflation, and general economic instability have left many Nigerians in a precarious financial situation, making calls for higher taxes deeply unpopular. Critics argue that increasing taxes in such an environment would only worsen the economic burden on already struggling citizens and businesses.
The situation was also acknowledged by Gates. In addition to his remarks on taxation, he also pointed out the alarming level of food insecurity in Nigeria.
“Today, Nigeria has the second-highest rate of food insecurity on Earth,” he said, underscoring the depth of the country’s hunger crisis.
This statement aligns with several reports highlighting that millions of Nigerians face food shortages, exacerbated by inflation, inadequate agricultural output, and ongoing conflicts in food-producing regions.
The World Food Programme (WFP) and other agencies have warned that without swift interventions, the country could face worsening food shortages and malnutrition, particularly among children and vulnerable populations.
Nonetheless, Gates’ focus on improving the tax system reflects a broader global concern about Nigeria’s fiscal sustainability. With its growing population and need for substantial infrastructure and social spending, Nigeria’s ability to collect more revenue is expected to remain a central issue in its economic discourse.
Economic experts said the challenge moving forward, will be finding the right balance between these two priorities: increasing tax revenue to fund vital services while ensuring that tax policies do not compound the economic difficulties faced by everyday Nigerians.
We speak a lot of English in this country, without ever thinking through the words we utter. Where in the world do you have GDP of less than $300B for population of almost 230 million, and the supposed experts are still talking about effective taxation? How much tax do you want to earn from per capita that is below $2200? You are taxing very POOR people, isn’t that immoral? Nigerians don’t have any economic or purchasing power to be paying taxes, how hard is this to comprehend? Majority of the population are already on deficits, who will pay their debts?
If we don’t have anything left in our near empty brains that can push this economy to at least $1.5 trillion, yammering on effective tax collection will really show how bereft and pitiful our quality of thinking is. You are scaling poverty at unprecedented rate, and the managers are still talking about government revenue and taxes, to be collected from which pockets, the same pockets they have already stolen and torn apart?
We are becoming too dull to be classed as proper humans here. If we don’t have anything to say about ramping up this pitiful economy to something that guarantees $4000 per capita, then we should all get out of here. We have nothing for the suffering masses.