and increasing value added
tax (VAT), government
should also seek other
novel sources of raising its
revenues to meet its growing
budgetary needs. This has
become inevitable in an era
oil revenues are no longer
enough to meet government’s
increasing needs to invest
in the country’s economic
diversification which is
needed should be hope
to diversify government
revenues too. Government’s
unconventional sources of
revenues should include the
formalization of the country’s
millions of informal sector
operators, who lacking tax
codes hardly file tax returns
not to mention paying the
right taxes at the right time.
Because ours is still informal
sector economy, there is no
other better way to increasing
government tax revenues
without increasing taxes paid
by millions of informal sector
businesses which without
their legal formalization, will
never pay the right taxes and
as when due.Another is the
need for a carbon tax policy
regime in Nigeria. Carbon tax
is the special tax imposed on
automobile through annual
number plate renewal fees.
Here, all automobiles should
renew their number plates
based on the engine capacities
of the automobiles. For
instance, automobiles with
V12 engine and above engine
capacities should annually
renew their plates with as high
as N200,000; those automobiles
with between V8 and V10
engine capacities, should
have to annually renew their
number plates with N150,000;
whereas autos with between
V4 and V6 should be mandates
to pay N100,000 in the annual
renewal of their number plates;
while automobiles with engine
capacities below V4 should
have to pay N50,000 annually
in renewing their number
plates.This number plate
renewal fee policy is to mitigate
the social and pollution costs
these automobiles impose
on the society daily. The full
implementation of the carbon
tax policy in Nigeria, as it is the
case in most modern economies,
should undoubtedly become
government’s important
source of non-oil revenue. Of
course, as high as N1.2 trillion
should be the minimum
annually revenue to be
generated from the country’s
automobile number plate
annual renewal.Tollgate policy
should be returned on the
country’s highways in a way
that cars and trucks should
pay according to the costs
they impose on the roads. To
ensure that the toll fees are
not diverted as was previously
the case, e-collection rather
than manual should be
used. Government should
privatize the roads so that the
private owners remit certain
percentage of the toll fees to
government while retaining
the rest for maintenance and
expansion of the roads. Also,
government can borrow money
to build roads and lease them
out to private companies to
pay a kind of mortgage fee plus
interest until the cost of building
the roads and the interest
are offset, then ownership
reverts to the private owner.
Drug tax should be imposed
on all drugs consumed in the
country, particularly on dietary
supplements. This means that
ministries of health and finance
should have their price tags
all drugs sold in the country
not only to create uniform
price across the country but
also to be able to tax the
drugs sold as well as reducing
drug abuses in the country.
Government taxing drugs,
especially disproportionally
taxing imported drugs,
drugs that could be locally
produced, should not only be
become an important source
of revenue but should also
become a way of encouraging
foreign drug makers to begin
to relocate their factories to
Nigeria, in an effort to make
their products competitive
in Nigerian drugs market.
Lottery and jackpot tax should
be imposed on lottery and
jackpot operators and winners
as well. Like most developed
economies using lotteries and
jackpots to generate a lot of
revenues, federal, states and
local governments in Nigeria
should surprisingly discover
how important lotteries and
jackpots are as sources of
revenue generation. Our capital
gains tax (profit incurred by
individuals or corporations
on the sale of non-inventory
assets, mostly realized from the
sale of stocks, bonds, precious
metals and properties) which is
one of the lowest in the world
should not only be increased
from 10 per cent to as high as 40
per cent but also should be fully
enforced with high evasion cost
and consequences. Property
should be made an important
source of government revenue,
taxing both owners and
renters of both residential and
corporate property. If not for
any reason, be it for providing
security and policing as well
as for cleaning and beautifying
streets and neighbourhoods. As
an important source of revenue
for local authorities, property
tax should however be designed
in a way that discourages double
taxation.Property tax along with
street and road traffic offences–
wrongful parking, traffic light
offences, driving on pedestrian
lanes, driving without number
plates, drunk driving – when
fully implemented, could
be a major revenue source,
particularly for state and
local governments.With fiscal
federalism and revenue sharing
formula that mandates all the
tiers of government to only use
internally generated revenues
for their recurrent expenditures,
while oil and other federal
sources of revenue are by
law wholly spent on capital
projects, mostly federal and
interstates projects, is needed
if we want government at all
levels to become innovative
and aggressive in their
revenue generation efforts.
E-collection policy as recently
put in place by the federal
government is one of the best
policies of this government.
This is because ministries,
departments and agencies of
government that are involved
in revenue generation
have been directed that all
receipts by them be made
directly to the Consolidated
Revenue Fund (CRF) at the
CBN using e-collection, an
electronic channel process,
which makes it difficult for
revenue generating MDAs
to corruptly divert public
revenues collected by them.
During his second term in
office, President Jonathan
should have in place an
unconventional economic
management team to be led by
an exceptional common-sense
economic development team
leader, whose first goal should
be to drive government’s ever
innovative and aggressive
revenue generation policies.
In other words, from the onset
of his second term in office,
the Jonathan administration
should be determined in
raising trillions tax naira
through both conventional
and unconventional means,
since without which, there
is no way the administration
should raise the kind of
money needed to be able to
tackle Nigeria’s infrastructure
deficit head-on, and without
which there is no way millions
of industrial, particularly
manufacturing jobs should
be created in our efforts to be
able to address the dangerous
level of unemployment in
the country equally head-on.
Enwegbara is a
development economist

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