To address the nation’s challenges bothering on governance and taxation, stakeholders have said that effective reforms, tackling of corruption, promoting accountability and expanding the formal economy are required.

They argued that these would be achieved through concerted efforts from the government, citizens and other stakeholders.

According to them, by prioritising good governance principles and implementing effective reforms, Nigeria could unleash its full potential and pave the way for a prosperous and inclusive future.

Executive Director, Finance, Investment and Management Oversight, FBN Holdings Plc., Samson Oyewale, in a paper presentation on ‘Governance and Taxation in Nigeria: Challenges and Way Forward,’ said while Nigeria had made progress in the realm of governance and taxation, several challenges persist.

Oyewale, who spoke during the investiture of the 16th President of the Chartered Institute of Taxation of Nigeria (CITN), Samuel Agbeluyi, maintained that addressing the challenges were crucial for achieving effective governance, enhancing tax administration and maximising the potential benefits of taxation.

Noting that the importance of good governance in Nigeria could not be overstated, Oyewale said it is crucial for economic growth, combating corruption, promoting social justice, strengthening democracy, improving public service delivery, fostering peace and security, as well as building trust among the citizens.

Stating that taxation is a sustainable backbone of a country’s funding mechanism, Oyewale lamented that Nigeria as a nation has ignored taxation to generate sufficient revenue for government for too long, “no wonder our tax-to-GDP ratio (four per cent against the capacity of seven per cent) is ranked among the lowest in the world.”

He called on the new administration both at the federal and state levels to re-launch the country into a new era of fiscal prosperity and responsibility for the benefits of the current and the future generation.

“Taxation places a higher burden of accountability on the government to provide purposeful leadership, while on the other hand, provides the taxpayers with a greater stake in governance and propels them to demand better governance from their government. The Nigerian taxpayers should, more than ever before engage the government on a binding contract between them,” he said.

In his acceptance speech, Agbeluyi promised to advance the cause of the institute through a six-year strategic plan in enhancing expertise in cross-border taxation and tariff management; members’ value with a focus on ethics and standard, as well as pursuing reforms in tax administration with the key objectives to enhance the quality of tax administration in Nigeria, among others.

Examining the statistics of the country’s fiscal and tax system to other nations, he said that most countries have put in place effective tax systems that are contributing substantial tax revenue to their Gross Domestic Product (GDP).

For instance, “Comparatively, from the perspective of tax types performance in Africa, South Africa, we may already know rely more on Personal Income Tax (35.5 per cent of total revenue) compared to Nigeria (11.4 per cent). This indicates a greater dependence on individual taxpayers in South Africa’s revenue generation. On the other hand, Nigeria derives a higher proportion of its revenue from corporate income tax (26.3 per cent) compared to South Africa (20.7 per cent),” he said.

From the comparative analysis, he said it indicated that as a country, Nigeria was yet unable to maximise its population potential to grow its tax revenue.

He said: “Several Nigerians are still outside the tax net. Businesses have not been able to grow effectively because of tax-related issues. I believe that if we effectively capture more people into the tax net, the number of taxes burdened on businesses will reduce and our economy blossom.

“In achieving this, we must pay critical attention to research, digital infrastructure, fiscal policy interventions and tax governance, among others.”

He added that with the institute’s partnership with the three tiers of government and critical stakeholders in the tax space, improving taxation, practices and compliance in Nigeria would help to grow the economy and uplifts the people.