Rivers State Governor Siminalayi Fubara has emphasized the urgent need for Nigeria to address its current economic challenges, stressing that increasing revenue through taxation is crucial to the country’s progress.
The governor made the assertion while declaring open the 156th meeting of the Joint Tax Board with the theme: “Opportunities and Strategies for Improving Taxation of High Net-Worth Individuals in Nigeria, held in Port Harcourt.
Governor Fubara noted that Nigeria’s economic situation requires increased revenue, and that taxation is a vital tool for governments to collect public revenue and provide public services.
The governor highlighted the importance of taxation, stating that without adequate revenue, it would be difficult for the government to meet its obligations to provide public services and advance the collective security and prosperity of citizens.
Governor Fubara also emphasized the need for state governments to maximize tax revenue collection, saying that this is essential for continued functioning and provision of public services.
He noted that in Rivers State, his approach has been to broaden the tax base without increasing the rate, which has resulted in increased internal revenue generation.
He added that the strategy has enabled the state to generate more revenue, as evident in the increasing collection figures on a month-by-month basis.
The governor’s comments come as Nigeria faces economic challenges, including high inflation and limited resources for state governments to deliver development and commitments to their citizens.
He said: “Consequently, the tax system is a matter of great interest to all Nigerians because without adequate revenue it will be difficult for the government to meet its obligation to provide public services and advance the collective security and prosperity of the citizens.
“With a nation struggling economically, with high inflation, state governments are seriously overwhelmed by the lack of adequate resources to deliver development and commitment that they had made to their citizens.
“The solution lies in maximising the collection of tax revenue by the government at all level if we must continue to function and provide public services.”
He added, “In Rivers State, our Approach is not to impose more tax on our people but to broaden our tax base without increasing the rate, which has enabled to generate more internal revenue as evidence in the increasing collection figure on a month by month basis.
“Apart from keeping us working with the collection that we are making, we are responsible. We are also using these resources to improve critical infrastructures including roads, schools, security and healthcare across the state.”
To address the current economic situation, Governor Fubara advocated for a fair, efficient, and effective tax system that promotes economic growth and development.
He urged the Joint Tax Board to develop policies that encourage high net-worth individuals to pay fair taxes voluntarily, while also channeling their excess resources into productive economic building and investment.
“A responsible tax system will impose nothing more than a fair amount that serves the public interest and it is attractive to businesses and investors.
“As you meet today with the focus in exploring opportunities and strategies for improving taxation of high Net-Worth individual in Nigeria.
“I urge you to come up with policy measure that encourage the super rich to pay fair taxes voluntarily while channeling their excess resoures into productive, Economic building and investment.
“This is the way to build stronger, broaden tax revenue based economy for our country, one that encourages more shared economy growth, opportunity and prosperity for every one.
“I hope your meeting goes today will yield results and recommendations that will be beneficial to the state and the nation in our quest for more progressive efficient and adequate tax system.
“Bear I mind that our present situation requires only increase in our revenue. Our situation requires increased revenue as at today, being the only solution that can take us out of our problem.
I, therefore urge you that in this section, areas of consideration should be to remove this nation from the wood.”
The governor commended the Joint Tax Board for its efforts in promoting tax harmonization, repealing obsolete policies, and strengthening state revenue agencies.
He assured that the Rivers State government is willing to cooperate with the Joint Tax Board to streamline the tax system, broaden the tax base, and strengthen internal revenue services.
However, speaking in an interview, Chairman of Joint Tax Board, Dr. Zacch Adedeji said the meeting’s focus on improving taxation of high net-worth individuals is a crucial step towards boosting revenue generation in Nigeria.
Represented by Mohammed Abubakar, Coordinating Director of the Federal Inland Revenue Service, Adedeji said: “This is a very important meeting as you all know the Joint Tax Board is meeting quarterly and this is one of such meeting.
“We look at emerging issues in taxation and we also focus on, no aspect of taxation is insignificant we just have to continue to build on the capacity that we have and to be able to adequately carry out taxation.
“The meeting aimed to address the challenges of taxing high net-worth individuals, including non-compliance, complex tax structures, and the use of consultants to evade taxation.”
According to Adesokan Olusegun, Secretary of the Joint Tax Board, high net-worth individuals constitute the largest contributors to personal income tax globally, with 90% of personal income tax generated in some African countries coming from this demographic.
He noted that in Nigeria, tax authorities are working to optimize personal income tax generation from high net-worth individuals.