Bill Gates, co-chair of the Bill and Melinda Gates Foundation, has pointed out that tax collection in Nigeria is low.
Gates made this statement during a Pan-African youth dialogue on nutrition in Abuja on Tuesday.
According to Daily Trust, the American business magnate is currently in Nigeria for a series of events.
At the event, Gates noted that the low tax collection presents challenges for adequately funding critical sectors such as health and education.
He emphasized that for citizens to trust the government’s ability to provide quality healthcare, there must be a commitment to effectively manage the funding of health programs.
Gates stated, “Over time, Nigeria needs to increase its funding for the government. The current tax collection in Nigeria is quite low.
“If citizens desire improvements in education and healthcare, they need to develop confidence that these programs are well-managed. Our foundation is involved with many successful examples that demonstrate how to properly allocate funds, ensuring efficient primary healthcare systems where employees perform effectively and facilities are appropriately staffed—avoiding both underloaded and overloaded centers.
“It is encouraging that we are enhancing the credibility of these health programs so that citizens will view primary healthcare as a priority deserving of significant funding as Nigeria gains fiscal flexibility.”
Gates’ remarks come in response to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who stated that his committee is proposing a law to the National Assembly to increase value-added tax from the current 7.5% to 10%.
Speaking on a Channels Television program, he said, “We are facing major challenges with our tax revenue. Our overall revenue is lacking, impacting both tax and non-tax income. The fiscal system is in crisis.
“When my committee was established, we had three broad mandates. The first was to examine governance, including our country’s finances, borrowing, and coordination between the federal government and sub-national entities.
“The second was to achieve revenue transformation since Nigeria’s revenue profile is alarmingly low. Dedicating our entire revenue to improve roads would still be insufficient. The third mandate pertains to government assets.
“The law we propose to the National Assembly seeks to increase the tax rate from 7.5% to 10% starting in 2025. We are unsure how quickly this law will be passed, and future rate adjustments are also outlined for specific years.
“In parallel, we plan to reduce personal income tax. Individuals earning about N1.5 million a month or less will see a decrease in their personal income tax. Additionally, corporate income tax will decrease from 30% to 25% over the next two years, which is a substantial reduction.
“There are various other taxes, including the IT levy and education tax, which we are consolidating into a single one. Initially, they will pay 4%, which will later be reduced to 2% in the coming years.”
