Monday, April 17, 2006

On Tax Revenue in Nigeria

The deadline for the submission of relevant paper work and payment of income taxes in the United States is today. The deadline closes at 11.59PM April 17th. The deadline is usually on the 15th of April every year; the deadline was shifted this year because it falls on a weekend.

I happen to fall among the greater chunk of Americans who procrastinate till the very end before getting their paper work in order. Thanks goodness for electronic filling and the zillion tax preparation software available; these tools have really taken the pain and stress out of this yearly civic duty.

As I battled with my tax papers over the weekend, I couldn't help but reflect on tax related issues and how these are being handled in Nigeria. The body saddled with this horrendous task is the Nigerian Inland Revenue Service, a federal agency fashioned after the British Inland Revenue. If the content and quality of the Nigerian agency's website is a yardstick, one wouldn't be surprised at its level of efficiency.

"For the year 2002, there were $250m (£142m) that the companies say they paid to the central bank that do not appear in central bank records...there were also discrepancies between figures provided by different arms of the government, and that accounting standards were low across the board." --BBC: Audit shows lost Nigeria oil taxes.

Note that this audit focused just on the oil sector. You can imagine what similar audits would uncover in other sectors of the Nigerian economy.

Even if Nigeria has all the oil fields in the universe, the lack of probity and the wishy-washy way financial matters are handled will always thwart the best reforms and efforts to move the economy out of the doldrums.

External links:
BBC: Audit shows lost Nigeria oil taxes
Nigerian Inland Revenue Service: