Dr. Ngozi Okonjo-Iweala, Director General of the World Trade Organisation (WTO), has delivered a clarion call to the Bola Tinubu-led federal government, urging a strategic overhaul of its tax and levy system. Speaking at a gathering of Women in Leadership Nigeria in Abuja over the weekend, Okonjo-Iweala stressed the importance of streamlining taxes and levies to prevent undue burdens on citizens.
“Higher taxes and levies may not be inherently negative, but they must be structured in a way that does not overwhelm the populace,” emphasized the former Minister of Finance. She underscored the necessity for the government to expand the tax base while exercising prudence in the imposition of new taxes and levies.
“Our tax to Gross Domestic Product (GDP) ratio is relatively low, standing at about seven percent,” Okonjo-Iweala noted. “To enhance government revenue, there is a need to bolster this ratio. However, it is crucial to implement taxes and levies strategically to avoid imposing excessive strain on individuals and businesses.”
Okonjo-Iweala highlighted the importance of offering quality public services as a justification for taxation, emphasizing the symbiotic relationship between taxation and government provision of services. “Taxation must be accompanied by effective service delivery to ensure citizens perceive the value in paying taxes,” she remarked.
While advocating for broadening the tax base, Okonjo-Iweala emphasized the imperative of aligning taxation policies with national development objectives. “To enhance tax administration and increase the tax to GDP ratio, we must prioritize broadening the tax base,” she asserted. “However, this expansion must be undertaken judiciously, considering the impact on taxpayers and the overall economy.”
In conclusion, Okonjo-Iweala reiterated the need for thoughtful deliberation in crafting taxation policies, emphasizing the importance of striking a balance between revenue generation and socioeconomic considerations. “The government must proceed with caution, ensuring that taxation measures are fair, transparent, and conducive to sustainable economic growth,” she concluded.