Peter Obi Advises Buhari On How To Tax Nigerians

Former Fidelity Bank chairman, Peter Obi, has addressed the tax problem of Nigeria, stating that the country's poor tax revenue is due to high number of unemployed Nigerians under the President Muhammadu Buhari-led administration.

The former Vice Presidential candidate said there's a downside to lack of jobs, and that's taking a toll on Nigeria's tax generation. He said unemployed Nigerians can't be taxed in order to increase the tax base of the country. He made this known during an interview with Arise TV.

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Nigeria is struggling to improve its tax revenue, and according to the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami, the country is not earning enough tax. Currently, Nigeria's revenue source is 70% generated from tax according to Nami, who has been pushing for an expansion of Nigeria's tax bracket.

Nigeria's tax-to-Gross Domestic Product (GDP) is 6.1%, while the threshold of West African belt is 15%. Countries with tax-to-GDP of under 36% are believed to have an economy that isn't viable. According to Obi, creating employment opportunities is the answer to improving Nigeria's tax problem.

"Tax is a very simple thing. The more employment and robust the economy, the more you can earn from tax. You can't tax unemployed people. You can't go to your village and tax people who are unemployed.

""We have 98 million people living under poverty before the COVID situation, now you are going to have over 100 (million) living under poverty. You are not going to tax them. Tax is like a bank account; if you want to withdraw more, you put in more.

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"So if the government has done the right thing, the more people you pull out of poverty, the more you can get out of tax. It's a simple thing, it's not rocket science." Obi said, adding that, "If you look at our tax net today, the people that are employed in Nigeria, is 50% of people that are supposed to be working 

"So if you put the other 50% into the net, you increase the tax overnight... so if you want more tax, you give people job." Obi said. Nigeria have labour force of 80.2 million, out of which about 21.7 million Nigerians are unemployed according to Quartz Africa, and million others are underemployed, as the rate rose to 28.6% in Q2 2020 according to NBS.