Minister of Finance, Mrs. Kemi Adeosun, on Monday disclosed that in the last seven months, the Federal Government has discovered 363,000 companies operating in the country without paying any tax before. These companies were said to have evaded several billions of naira in taxes.
Adeosun, who made this disclosure at a panel discussion on “Sub-Saharan Africa: Just a Rough Patch” on the side-line of the ongoing 2016 spring meetings of the IMF-World Bank in Washington DC, USA, said getting the tax evaders to fulfil their tax obligations and ensuring unpaid taxes are remitted to treasury is a major priority of the government.
Adeosun stressed that there were enormous revenue realisable from taxation to keep the economy going on a sustainable level without bothering about oil revenue. Realising that taxation is a goldmine yet untapped, she pointed out that the government had been working assiduously to ensure it plugs all loopholes in tax revenue collection.
According to her, “there are still low-hanging fruits in revenue collection. We are using technology, we are using cashless platforms and we are very serious about hitting those targets. Are there risks, yes, are we aware of them, are we trying to mitigate them in our action plan, absolutely yes.”
Lamenting that at the moment, the economy recorded only 5 per cent government revenue to GDP but now targeting 10 per cent, Adeosun noted that the level of compliance in VAT revenue collection was 12 per cent.
Adeosun explained that the federal government’s approach was focused on improving the efficiency of tax collection and broadening the tax base.
“We are using technology to enhance collection, linking up databases from diverse government agencies, auto debits of VAT from corporate entities and government contractors and the rollout of Biometric Verification Number (BVN) across bank account holders. We have also ensured that FIRS staff receive increased incentive pay for delivery on targets,” she said.