The House of Representatives Committee on Finance has expressed concerns that only nine per cent of companies registered in Nigeria are captured in the tax net, while only about 35 million Nigerians pay tax, highlighting the need for reforms.

James Faleke, chairman, House committee on Finance said this in his opening remarks at the public hearing on the four tax reform bills on Wednesday at the National Assembly. The bills are Nigeria Tax Bill, Joint Revenue Tax board bill, Tax Administration Bill, and the Nigeria Revenue Service Bill.

The chairman stated that the imbalance in the payment of tax is unsustainable if Nigeria must adequately fund critical infrastructure needed to build the Nigerian economy to a desirable level. He cited experts estimates suggesting that Nigeria requires $3 trillion (N1.8 quadrillion) over the next 30 years (that is, equivalent to $100 billion annually) to bridge its infrastructure deficit, but stressed that IGR falls significantly short of this amount, leading the government to borrow substantially in order to bridge the funding gap.

“This reality highlights the urgency of implementing tax reforms that will simplify and enhance revenue collection, reduce reliance on borrowing, and drive sustainable development”.

Speaking further, he noted that for many decades, Nigeria’s tax laws have remained largely unchanged and no longer in tune with economic realities, noting that while these laws served their purpose at the time they were enacted, the economic and business landscape has evolved significantly over time. (The Guardian)