BY EMEKA EJERE
Lack of political will to enforce taxes has been identified as one of the major factors constituting hindrance to improving internal revenue generation in Nigeria.
The Director General, West African Institute for Financial and Economic Management (WAIFEM), Dr Baba Yusuf Musa, who stated this in a presentation at the weekend, stressed the need to enlarge the tax base to spread the tax burden more evenly across the population, so as to lower marginal rates and disincentives to productive activity
Speaking on the topic: ‘Financing Sustainable Economic Growth and Development: Challenges and Opportunities’, Musa observed that there is high dependance on PAYE from public sector employees, while direct assessment is almost 0%.
He called for the automation of collection processes to improve efficiency and meet up with changing operational procedures of taxpayers, saying “this should be followed by adequate supervision from the regulatory body or government.”
According Musa, there is virtual absence of institutional mechanism to discipline borrowing by the three tiers of government, an issue, he said, could undermine macroeconomic stability, without urgent attention.
He noted that there is weak intergovernmental fiscal system and absence of any set annual limits on debt of FGN, and individual state and local government.
“Too often state governments relax their budget constraint then contributing to public sector deficits and threatening national solvency”, he said.
Musa called for “coordination between fiscal and monetary policy, and debt policy that supports fiscal discipline.”
There is “need to design new financing strategy to ensure a coordinated approach to debt management such that the country borrows when” borrowing is needed, sustainable and provides good value for money.