35,000 Companies Evade Taxes in Nigeria

Some 35,000 firms are said to be evading tax payment in the county and government said that this stalling her responsibility of providing basic amenities.

The government, said plans are underway to introduce e-payment to   capture more companies and individuals in to government tax net.

Dr. Yerima Lawan Ngama, minister of state for finance in a keynote address at a workshop of the African Tax Forum organized by the Federal Inland Revenue Services (FIRS) at Abuja, regretted that government was losing large chunk of money through non- remittances of taxes and emphasized drastic step needed to be taken if the economy is to move forward.
 
Presently, the Nigeria Customs Service (NCS) is the agency of government using E-payment for its Duty collection.

The Minster said government may consider adopting similar approach for tax payment.

He said that the fall out of tax evasion is the high cost of doing business in Nigeria and that the implication of not paying taxes is robbing government of opportunity of  providing  infrastructural facilities such as electricity, good roads, water while it has also added to high cost of doing business in Nigeria.

Apart from the high incidence of tax evasion, the minister stated that compare to the size of Nigeria, the quantum of taxes collected is nothing to write home about.

The situation, he said was caused by the large size of the informal sector within the   Nigerian economy.

Dr. Ngama lamented that despite the fact the Nigeria is the number one fastest growing economy in Africa and the fifth in the world, 54 percent of business activities in Nigeria are taking place in the informal sector while the figure has reduced to 40 percent at the present.

Unlike in Ghana which collects 21 percent of its Gross Domestic Product (GDP) as taxes, the minister said it is only 7 percent GDP in Nigeria.

Describing the situation as unacceptable, Dr Ngama said the government would do all things possible to bring a larger part of the informal sector into the tax net with a view to raking more taxes.