Stats: 3,191,854 members, 7,945,729 topics. Date: Wednesday, 11 September 2024 at 03:45 AM |
Nairaland Forum / Nairaland / General / Politics / Nigeria's growing debt and Revenue problem explained. (1151 Views)
Chatham House And Nigeria’s Growing Cultural Cringe By Farooq Kperogi / Do We Have A Spending Problem Or A Revenue Problem? Let's Discuss The Manifesto / Reflections On Princeton Lyman’s View On Nigeria’s Growing Irrelevance (2) (3) (4)
Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 9:35am On Apr 19, 2020 |
If wondering why Nigeria's always borrowing the charts below will give some insight. Nigeria has a revenue problem as stated by finance minister Zainab Ahmed. Nigeria has been notorious for having poor tax collections and policy. The federal government frequently misses its revenue targets. This results in the need to borrow to fund ever growing needs. Nigeria budgets lag behind other countries with similar gross domestic products like Egypt and South Africa. This means Nigeria has to more with less money percapita. If the country collected the a 15% tax to GDP ratio like the IMF recommends it would be in a better position. Nigeria lags behind its peers in that area and the situation gets worse looking at the states. The solutions require better tax collections in non oil revenue. It's been repeated ad nauseam the government needs to widen the tax base and diversify the economy. Oil shouldn't be the main export earner. Nigeria should look into tax reforms and economic reforms to accomplish this. Front page: Lalasticlala mynd44 3 Likes 1 Share
|
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 9:35am On Apr 19, 2020 |
Compare and contrast Front page: Lalasticlala mynd44 1 Share
|
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 10:01am On Apr 19, 2020 |
It's amazing how bad Nigeria is collecting taxes. Even poorer states Niger Republic manage to collect more on average. These charts show why taxes are also increasing. The state tax revenue is pretty pathetic as well. If Nigeria were aggressively collecting taxes and showing little to nothing for those tax receipts there would be heads rolling. 2 Likes |
Re: Nigeria's growing debt and Revenue problem explained. by Stalwert: 10:10am On Apr 19, 2020 |
When it was stated that over 50% of VAT is being collected by one state: Lagos, then any educated individual should understand there is a serious problem in this country. We want Health care but we are unwilling to pay for it. Government should focus its lens on under performing states else we will keep borrowing to meet up. 1 Like |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 10:31am On Apr 19, 2020 |
Aside from raising more revenue the FG should cut down the bloated civil service. The eat up over 2/3 of the budget and it's constantly growing. Anytime there's an issue the first thing that will be cut is the meager capital projects budget. It's not politically expedient to cut workers especially when unemployment constantly rising. The states are also concerning. They pretty much collect nothing choosing to live off federal transfer payments. Alot of states could have higher IGRs than allocation if they collected more taxes. It all depends what services the state needs to provide. 3 Likes 2 Shares |
Re: Nigeria's growing debt and Revenue problem explained. by Nobody: 12:04pm On Apr 19, 2020 |
Good post, and this is what has been said over the years, from administration to administration. The problem is, people will shout that 'we are poor' Meanwhile, we want our country to be like Dubai. (UAE). UAE produces the same amount of oil we produce, meanwhile they have 11 million people, we have over 150 million people, or more. and we somehow expect the oil money to be magically enough. The problem with this government though is that they took power to share money. Just like most previous governments. And the problem with Nigerians is that we believe we have more than enough money, and all we have to do is to share the money 'more fairly'. Well, when the budget for one state police force in the USA is five times that of the budget for the entire Nigerian police force, and when the educaiton budget of Canda's primary schools is far more than what we spend as our total budget, and yet we expect US and Canda level....I have to think that we are living in Sugar Candy Land, not reality (Animal farm readers will get what I am talking about) Taxes has to be one way. Just the other day, one Nigerian was cursing our government for not paying Nigerians 400 euros in palliatives. The european countries where he lives, people pay heavily in taxes so that the government has money to pay for stimulus. (I know one doctor here in Nigeria who has refused to take PLAB to go to UK because he stated that the UK government will collect half his salary in taxes). If we charged taxes in Nigeria at the rate they charge them in the UK, people will call government wicked. Yet, that is how countries like Germany and Denmark can afford free education for their people...tax rates up to 50% of earnings per annum. Also, most European countries are manufacturing societies, which means they make lots of things for export. Here in Nigeria, we deliberately keep electricity power prices low by law, then we refuse to pay for power, and then we bypass meters when installed, and we expect DISCOS to have cash to pay GENCOS. Like they have a magic tree growing money. Because there is no power, industrial productivity is down, and severely down. Meanwhile, most of us want to go and work as clerks earning fat salaries, or as importers of expensive goods, putting pressure on our scarce foreign exchange..and we look down on technicians and so on....and then cry when we don';t have light. And then there is the subsidy nonsense, where NNPC spends most of its money keeping prcies low, and most of the rest importing fuel. No money for new refineries, no money to improve existing refineries, because 'subsidy is what we benefit '.....yes, like economies run on government controlling prices, (and if government controls the prices of what Nigerians sell, they will protest). We are living in a fantasy, that we are rich. We are not rich, and our fantasies are making the matter worse. And the painful thing....we don't want to wake up and put pressure or vote in people who would change things. No, it is better to live in sugar candy land, where everything is provided for us 24//7. 7 Likes 3 Shares |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 1:21pm On Apr 19, 2020 |
kikero: The economic policies Nigeria conducts are just as damaging as corruption. It's pretty insane how the government finds new ways to burn through money. Honestly Nigerians love free bad service instead of paying for good service. My favorite example is the national ID card. Everyone complains the service sucks and they dont get freee card. Nigeria doesn't have this issue with drivers licenses you pay for or passports. 4 Likes |
Re: Nigeria's growing debt and Revenue problem explained. by debaj10: 1:33pm On Apr 19, 2020 |
bottom line:
Nigeria is sinking.
fast. prepare ur self. |
Re: Nigeria's growing debt and Revenue problem explained. by mrvitalis(m): 1:33pm On Apr 19, 2020 |
Blue3k:Try that n labour would strike |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 1:44pm On Apr 19, 2020 |
mrvitalis: Lol I'd copy Ronald Reagan by firing them and banning them from the civil service problem solved. They can easily replaced with new graduates looking for jobs. You do know the youth Unemployment is over 20%. The overall unemployment rate is over 20% as of 2018. They have no leverage in this job market to push their weight around. 2 Likes
|
Re: Nigeria's growing debt and Revenue problem explained. by Bevista: 1:54pm On Apr 19, 2020 |
kikero:Taxes do not just generate revenue for governments to use, it also makes citizens Demand accountability from their governments. Most of us don't pay taxes, so we always tend to see public funds as "government money", but if everyone is paying taxes, suddenly everyone will become interested in how the funds are utilized. Having said that, our governments have not demonstrated that they can be trusted with more money. Govt needs to show that they are responsible with the current public funds they are receiving before demanding higher taxes from citizens. Due to govt failed policies, manufacturing is dead, exports are almost non-existent (apart from oil), unemployment (and underemployment) is ridiculously high, 80% of the population living below poverty. Where does the govt expect citizens to get money to pay higher taxes? Just a simple provisions of stable power supply would galvanize the private sector. Why have they not done that?. I agree with you about Nigeria being a poor country. The illusion of wealth comes from the fact that government officials tend to loot so much and live life of affluence. This, then, gives a false sense of national wealth. However, I've said it many times that, even if there was zero stealing by government officials, our revenue is still terribly abysmal. Just take a look at the budget per capita and compare it with other countries, then you realize how terrible our situation is. A situation, unfortunately, compounded by corruption. 7 Likes 1 Share |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 3:08pm On Apr 19, 2020 |
Bevista: I agree with your points but I do think there's room to expand tax base. I find it hard to believe Democratic Republic of Congo, Niger Republic and Togo all found a way to raise tax revenue and Nigeria cant. They're banking more VAT and few other little taxes. I currently believe manufacturing, mining and LNG are best routes to productivity. LNG because Europe wants alternatives to Russia and Asia is growing and wants cheap energy. The rest could be sold to other Africans since they're right next door buying manufactured goods. Stalwert: Yeah the government should figure out why VAT recipient are so lpw in other states. It's pretty odd there's a huge disparity between states. 3 Likes
|
Re: Nigeria's growing debt and Revenue problem explained. by Bevista: 3:41pm On Apr 19, 2020 |
Blue3k:Agreed completely. I, personally, would like the tax base to be expanded. If not for anything, it will force citizens to become more involved in governance. They'll ask more questions and demand accountability on how their money is being used. Also, we're going into a new global economy in which oil will not have as much relevance anymore. It will be difficult to ever see $50 oil price again, so alternative sources of revenue is now even more imperative. I still maintain, however, that the government has consistently shown they can't be trusted to properly manage public funds. If they maintain this attitude, more tax money won't change anything except to continue lining the pockets of government officials. 2 Likes |
Re: Nigeria's growing debt and Revenue problem explained. by Tianamen1: 3:46pm On Apr 19, 2020 |
@Blue3k Where do I start from. Nigeria does not just suffer from low tax revenues, but also a highly wasteful population with misplaced priorities (effizy culture). A solution to nigeria's problems is to increase the VAT rate to at least 15 percent from the 7.5 percent it is currently at. Why Lagos collects the most VAT is because it is the main entry port for imported goods. This is pretty simple to understand. In the end all consumers across the whole country pay the VAT as a result of increased prices.You mentioned DRC. The VAT rate there is 16 percent. The other taxes that are absolutely important to increase and enforce are property taxes, estate taxes, and vehicular usage taxes. All these taxes must be progressive whereby a bigger house pays a larger amount. The governments both federal and state should not focus on increasing income taxes or even worse corporate taxes now as this will discourage investments. In summary, taxes should be aimed at achieving two goals: 1. Increasing revenue 2. Reducing Nigerians purchasing of unnecessary goods (fighting effizy). 3 Likes 1 Share |
Re: Nigeria's growing debt and Revenue problem explained. by StaffofOrayan(m): 4:00pm On Apr 19, 2020 |
Nigeria was not created to succeed. It's just a contraption to trap and break Southerners who are the major contributors to tax in the first place. We have been conditioned to believe we are broke yet we have the best paid politicians in the world. Being a politician in Nigeria is probably the easiest way to become wealthy because you are accountable to an entity that is only real in the eyes of fools. |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 4:05pm On Apr 19, 2020 |
Tianamen1: I like your tax code goals. Some of your proposals remind me of grandstar's. Nigeria should rather lower corprate taxes to make doing business cheaper. If it results on more people being employed paying other taxes great. An ad valorem tax is cool. I just wouldn't want luxery tax. 1 Like |
Re: Nigeria's growing debt and Revenue problem explained. by Wilstino: 4:33pm On Apr 19, 2020 |
I have no issue with high tax, but my problem is with the politicians, who we can't trust to effectively manage our tax and give us dividend of high taxation like in the scandanavia and other western countries. Such as good road, electricity, Healthcare etc. Until there is genuine will power from the Govt to fight corruption and nip it in the bud, I won't advocate for high taxation on Nigerians just yet. Else, it will mean more looting for the politician, as is the case now. |
Re: Nigeria's growing debt and Revenue problem explained. by helinues: 4:55pm On Apr 19, 2020 |
The issue is not about revenue.. The ones they have been collecting for decades, what have they done with it? Why should I pay tax when I am not going to enjoy my money with basic needs from govt? |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 5:15pm On Apr 19, 2020 |
helinues: It is about revenue and what they're budgeting money on. Historically the money been wasted or used to fund a bloated work force. Even if they used money judiciously it wouldn't cater for most of Nigeria's needs. Notice how less than 25 percent of budget goes to capital projects in 2019. When oil prices dropped they cut capital projects first. You do pay federal taxes indirectly buying goods. We should vote in a competant government that uses taxes well. 2 Likes
|
Re: Nigeria's growing debt and Revenue problem explained. by grandstar(m): 6:26pm On Apr 19, 2020 |
Tianamen1: Your No.2 tax goal won't work. Goevrnment tried to rein in spending on the luxury lace "wonyosi" but failed. A simple plane ticket or smugglers bringing it through the back door quickly makes mincemeat of such ideas. The "truth" is that "wasteful spending" occurs in all societies. Whether it is Japanese women mad love for Louis Vuitton bags or Americans love for Japanese cars, signs of "wastes" are everywhere depending on how you see them. Frankly speaking, they are all part of the economy and I see nothing wasteful in them. Those so-called wasteful things provides jobs for people and puts food on the table. America found out that for every 1cent reduction in import duty, it generated 3 cents of taxes within the economy itself. Many of these imports would be "unnecessary things". When you talk of unnecessary things, hard drugs comes to mind. If it is a latest Prada for your side chic, that's another story altogether. 2 Likes 1 Share |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 2:39pm On Apr 20, 2020 |
A good tax Policy goal should be to slow down population growth. Nigeria should copy Singapore model by subsidizing birth control, taxes and awareness campaigns. I dont think singapore is having a huge demographic problem like China's and the policy wouldn't be authoritarian. Wilstino: Oh well when Nigerians stop electing clowns we'll get there. It's always amazing how in major elections the front runners never want tondebste or explain their ideas to the public. 1 Like |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 2:18pm On Apr 21, 2020 |
Final bump: |
Re: Nigeria's growing debt and Revenue problem explained. by Tetrahedron(m): 2:21pm On Apr 21, 2020 |
All these mathematics n graph n permutation in two words Shthole country |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 8:31pm On Apr 22, 2020 |
I've noticed a lot of arguments about why Nigeria cant provide stimulus. It's pretty obvious Nigeria doesn't have the cash. Nigeria could borrow it send it to everyone electronically adding to inflation. The treasure reserves are used to prop up the naira to make imports cheaper. |
Re: Nigeria's growing debt and Revenue problem explained. by omohayek: 7:17am On Apr 23, 2020 |
Blue3k:Why would any of them bother with policies and ideas when Nigerian voters have repeatedly shown that they don't care about such things? How many votes did Moghalu get in the last election? The only things that matter to the vast majority on election day are "tribe", "zone", religion, and who is handing out the best bribes (be it "rice and chicken" or free kerosene). The Nigerian electorate has exactly the low quality of political representation that it deserves. 2 Likes |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 2:38pm On Apr 28, 2020 |
Notice the oil revenue collapse and Nigeria runs to IMF for a few billion dollars. They will naturally blame the CCP-19 virus but the underlying issue was always their tax collection. There's an inherent weakness in being resource dependent economy. Nigeria's debt to GDP not bad. It's the debt to revenue that bad. 1 Like |
Re: Nigeria's growing debt and Revenue problem explained. by Covidodo: 3:21pm On Apr 28, 2020 |
Nice topic . But I think one of the major problems facing Nigeria is her 'structure' . Let's go back to regionalism and allow each region to fashion out their own economic policies . Why on earth should Lagos and Yobe have the same VAT regime for example ?? 50 years from now , this topic would still be relevant because we are shying away from the truth that we all know . Most of the problems facing Nigeria are not insurmountable if we agree to readjust the structure of Nigeria. Nigeria is presently not structured to succeed in anything . |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 3:40pm On Apr 28, 2020 |
Covidodo: I dont think the structure matters. The issue is the tax code. States already do set their own bad policies. The exclusive list should be vastly reduced. Most importantly the land use act should be repealed and mineral rights and should be given to individuals. Yobe and Lagos should have the same vat rate because it's fair. The government shouldn't play favorites between states. The VAT is regressive by nature but charging poorer state less wouldn't be fair either. The rich people in the Yobe will just preferential treatment. 1 Like |
Re: Nigeria's growing debt and Revenue problem explained. by Blue3k(m): 7:06pm On May 06, 2020 |
Lol everyone complaining about the government taking IMF loan should know the other options involve taxing them more and or cutting spending. We'll see if the government actually scraps and mergers these ministries departments and agencies (MDAs). They promised their "masters" the IMF they wont continue subsidizing fuel and will raise electricity tarrifs. |
(1) (Reply)
Criticizing Wike Won't Stop God From Putting Sinners In Hell Fire / APC Governors In The Dark As Oshiomhole’s Bulama Emerges National Secretary / Only One Godwin Nogheghase Obaseki Graduated From UNIBADAN In 1979..
(Go Up)
Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health religion celebs tv-movies music-radio literature webmasters programming techmarket Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 73 |