Vice President Kashim Shettima has revealed why Nigeria has one of the lowest tax-to-GDP ratios in the world.
According to the Vice President, the low tax-to-GDP ratio remains a troubling issue due to long-standing habits of tax avoidance among citizens.
Speaking at a joint event in Abuja hosted by the Association of National Accountants of Nigeria and the Chartered Institute of Taxation of Nigeria, the Vice President’s message was read by Dr. Tope Fasua, Special Adviser to President Bola Tinubu on Economic Affairs.
Shettima, who is currently in Senegal for the country’s Independence Day celebrations, noted that the Nigerian economy suffers because many citizens have, over the years, learned how to conceal their wealth from government oversight. This behavior, he explained, plays a major role in why Nigeria has one of the lowest tax-to-GDP ratios in the world.
In his words, “Nigeria is a great country with immense prospects for all. But over the decades we developed into a nation where many people perfected the art of hiding their wealth from the government. This is the reason why we have one of the lowest tax-to-GDP ratios in the world.”
The Vice President’s representative explained that national budgets are crucial tools for planning, both for government and private entities. They contain valuable information that helps businesses and households make informed decisions.
Shettima also noted that despite the tax challenges, Nigeria is a land filled with opportunities. He urged Nigerians to stop investing their money abroad and instead consider building up the local economy, which offers strong returns and the benefit of contributing to national development.
“The challenge is that all stakeholders must educate our public and open their eyes to the need to invest in their own country. Enough of sending hard-earned money from Nigeria to purchase all sorts of assets abroad when we have development to do in our country,” he said.
He also criticized the tendency among some citizens to avoid taxes, despite efforts by the government to simplify the process and reduce rates. According to him, taxation is based only on profits, not gross income, yet many still view government efforts with suspicion.
“Enough of dodging around and involving in financial malpractices when our tax rates are being reduced and no one is going after your turnover, but a bit of your profits, after you may have backed out all your expenses,” he added.
Shettima pointed out that the 2025 federal budget, pegged at N54.99 trillion, aims to close financial loopholes, reduce waste, and ensure investments are focused on key infrastructure and human development. The budget also includes a N13 trillion deficit to be addressed through a mix of borrowing and partnerships with private firms.
