Bill Gates Highlights Low Tax Collection as a Challenge in Nigeria
Abuja, Nigeria – Bill Gates, co-chair of the Bill and Melinda Gates Foundation, has pointed out the low level of tax collection in Nigeria as a significant challenge to adequately financing essential sectors such as health and education. Gates made this observation during a Pan-African youth dialogue on nutrition held in Abuja on Tuesday.
Currently in Nigeria for a series of events, the American philanthropist emphasized that increasing tax revenue is crucial for the government to effectively fund and manage critical public services. He explained that citizens need to develop confidence in the government’s ability to deliver quality healthcare and education. For this to happen, there must be a strong commitment to ensuring that health programs are well-managed and adequately funded.
“Over time, there are plans for Nigeria to fund the government more than it does today. The actual tax collection in Nigeria is actually pretty low,” Gates remarked. He noted that as citizens see improvements in how health programs are managed, they will likely support increased funding for these services. This includes creating a well-functioning primary healthcare system where resources are efficiently allocated, and services are equitably distributed.
Gates’ comments come in the context of ongoing discussions about tax reforms in Nigeria. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, recently announced a proposal to increase the Value Added Tax (VAT) rate from 7.5% to 10% by 2025. This proposal is part of a broader effort to address Nigeria’s fiscal challenges, including the country’s low revenue from taxes.
Oyedele explained that the proposed tax reform also includes measures to reduce the burden on individuals and companies. For instance, personal income tax rates are expected to decrease for those earning ₦1.5 million or less per month, and corporate income tax rates will be reduced from 30% to 25% over the next two years. The reform aims to simplify and consolidate various taxes into a more manageable system, which could help improve compliance and increase overall revenue.
As Nigeria grapples with the need to fund critical infrastructure and public services, these discussions on tax reforms and effective management of resources will be crucial in shaping the country’s economic future.
