Nigeria Finance Minister, Mrs. Kemi Adeosun on Thursday said that state governors get away with looting the resources of their various states because of the low level of tax compliance at the state level.
Mrs. Adeosun made the remark at ”Tax Thursday” a Facebook live video chat programme organised by the ministry of finance.
Answering questions on the programme the minister said that because many Nigerians at state level don,t contribute to the resources at the state level, the governors get away with looting, stressing that governors will become more responsible if they are held to account by those who contribute to the resources.
She said, ”It is our duty, this is our national duty. People get very patriotic about Nigeria; being a Nigerian is not about the flag, it is about doing the right thing.”
“I think as we get together, as people pay more taxes as well, it does fight corruption,” she said.
“The problem at the moment is this: most state governments, there is no input from people in where the state government gets it money from; so, they come to Abuja, give you money and it goes back to the state.
“But when you in the state actually pay money into that state government, you’d get involved. You would join the political party, when they call you for budget town hall, people would turn up; they would want to know what exactly is the government planning to do.
“You’d get a lot more engagement from the public and that’s what keeps an eye on government; that’s what keeps an eye and checks corruption and checks wastage and make sure that money is spent not on wasteful project but on needful projects.”
According to the minister, such relationship between government sand tax players alerts the people to the activities of government and creates vigilance on the part of taxpayers.
“I think that that partnership of taxpayers and government is very, very critical. If government gets money it doesn’t need, it’s not accountable to the people for, it is very easy for that money to go astray,” she noted.
“But when your money is there, then you make sure that, really, people do the right thing. And I think that’s very important – it is important for government and it is important for the people.”
Adeosun also said during the interaction said the country has approved a policy to tax first class and business class tickets as well as other luxury goods.
“We signed something yesterday on luxury goods: champagne, brandy, whiskey, wine, jewelry, high-end jewelry,” Adeosun said.
“We’ve signed something that will bill access charge on first class and business class tickets, we are just doing the final parts of the implementation and we also want to try and amend the tax payer book on high end cars, luxury cars.”
She assured that such taxes will be used prudently for the development of the country’s infrastructure.
She continued, “If we move our tax-to-GDP ratio up, it means two things: One, we will be able to provide more services to our people. Many of the things we are not able to do are function of the fact that we don’t have enough money.”
“We need to build more schools, we need to build more hospitals, we need to build more roads. This is not rocket science. Every country has challenges, there is nothing we are facing that other countries haven’t faced.
“Every poor nation has very poor tax compliance rate and every rich nation has high compliance rate. So we want to be a properous nation. So what is in it for the citizens? If everybody pays, there will be far more money in the pool to be spent on the services that we need.
“These things are what we call public goods, and they are funded from taxes. If you have been all around the country, you’ve seen the need, you’ve seen the number of people that are living in poverty, we can lift people from poverty if we have the right money.
“We could do so much more in the economy if we had the money. If our public scholl system improves, many people who are currently paying school fees will move their children back into the public schools.