WOW, Nice photo !

Edo moves to tax one million additional prospective payers

By Tony Ehighiale, Benin


Edo State Governor, Comrade Adams Oshiomhole has promised to broaden the state’s tax net to capture the over one million taxable adults in the state.


According to the governor, only 160,000 people presently pay tax out of the state’s four million population.


The governor made the disclosure while delivering a lecture on “Dwindling Revenue from Crude Oil: The Challenges for State Governments” at the maiden public lecture organized by the Correspondents Chapel of the Edo State Council of the Nigeria Union of Journalists (NUJ) in Benin City, on Wednesday.


Oshiomhole said, “We have decided to expand the tax net, to move it away from just salary earners that pay, ‘pay as you earn’ and few other people who volunteer to pay to extend it to consumption tax because, everywhere in the world, people pay for consumption and it is a more equitable way to tax because typically, those who earn a lot tend to consume more and therefore, should pay more taxes.


“You will see a man driving a Mercedes 600, meanwhile his tax suggests that he is on level 10 because he may have benefited from a Dasuki. Now, if he gets such free money, it is bad enough that this money accrued from corrupt practice, but it is worst that he spends it, consumes it without paying anything out of it.


“My own thesis is: why we must shift more emphasis to indirect consumption tax including value added tax is that if the state remains so weak that people who can have access to funds by whatever means that they didn’t earn and therefore because it is not an item that can be taxed, but when he wants to go and buy that Mercedes 600, he finds that he has to pay a 10% VAT.


“At least, he would have paid something. The tragedy we have at the moment is that you take money out of the system, you didn’t work for it; you steal it and spend it. It goes through a full cycle without any tax accruing to state authorities and then you drive it on our 6-lane Airport road that we had constructed with tax payers money.”


According to him: “That is why we are looking at other ways to ensure that however you make the money, if it is not captured at the level of income, it will be captured at the level of consumption when you try to spend it.


“I think it will interest all of us to know that as things are today, the population of Edo State is approximately 4 million but only 160,000 people are taxpayers, whether ‘pay-as-you-earn’ or property tax or any form of taxes. So, the tax burden is borne by only 160,000 persons for government to provide services for 4 million people. Now how far can you go with that?


“For us to survive, going forward, we must broaden the tax net. I believe that the taxable people in this state are up to 1 million. But a couple of things have happened over the years that we are not going to curb it overnight, no one government can curb it overnight.” 

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