Country Rankings - Nigeria
Oct 04, 2016 Nigeria: shamnestyNow, from a country which many believe pays too much tax, to one where hardly any is paid at all: Nigeria. So, at first glance, the headline that the Government is considering a tax amnesty is hardly going to make people fall off their chair with excitement, even though most studies point to the fact that tax amnesties are generally a bad thing, especially if repeated, because they tend to erode compliance rather than foster it. However, it is still a story worth noting. Because in Nigeria's case, its problems aren't so much with a lack of tax compliance, but a lack of taxpayers. According to data used to compile the Heritage Foundation's Index of Economic Freedom, tax revenue as a percentage of Nigeria's economy was just 6.1 percent in 2015. And the majority of this revenue came from the oil sector. I fail to see therefore, how a tax amnesty is going to help Nigeria out very much. Indeed, in the long-run, it could be counter-productive. The logical extension therefore is that Nigeria needs more taxpayers, rather than more taxes, which is the course it is currently pursuing to fill a widening fiscal void. However, I suggest that Nigeria takes a leaf out of South Africa's book. There, the tax authority has done a remarkable job in expanding the tax base, from just 1.7m registered taxpayers in 1994 to 15.4m in 2013. Furthermore, the half-a-million businesses registered for tax in 1994 had swelled to 2.2m by 2012. And South Africa's tax-to-GDP ratio now sits at a more workable level of 27 percent. Still, I wouldn't advise Nigeria to follow Pretoria's fiscal policy entirely. Because, somehow, South Africa has contrived to end up with a substantial budget deficit, despite compound revenue growth rates of 15 percent per year until relatively recently. And therein lies the rub, you could have the most efficient tax system in the world. But if the Government can't stop itself from spending more than it receives, well, we all know what happens...
Aug 31, 2016 Nigeria: ouch!Unfortunately, fiscal efficiency, stability, flexibility, and legal certainty aren't traits you'd ordinarily associate with Africa. If anything, many African states are the very antithesis of these things. This isn't just a shame for taxpayers and investors attempting to navigate unpredictable and dysfunctional tax and legal frameworks, it is a tragedy for governments too, as they lack the tools to deal with fiscal and economic crises. However, it has to be said that African governments don't help themselves sometimes, and they have a tendency to make matters worse in this respect. A common example is by changing the terms of long-standing tax agreements with foreign investors, especially in the resources sector. And there seems to have been a general failure to get to grips with corruption. Take Nigeria for example, where the Government is about to shoot itself in the foot by introducing a new tax on electronic communication services. Not only will this add to an already highly taxed sector, it could also scupper the Government's own laudable plans to spread affordable internet access throughout the country, a policy intended to accelerate the nation's economic and social development. It looks as though Nigeria is bringing in this tax for no reason other than the Government needs the money – 70 percent of its revenues are derived from oil sales, and oil prices recently underwent a historic correction. In a way, this isn't surprising. After all, what government doesn't raise taxes, or create new ones, for this reason? But what has irked the business community so much is that very little thought seems to have been given by the Government to the impact of this tax. Perhaps the Government's thinking is that Nigeria already has one of the worst tax systems in the world for businesses – PwC ranked it 181st out of 189 countries in its Paying Taxes 2016 Index – so one more tax isn't going to make a great deal of difference. It would probably deny such an allegation strongly. But it's a tragedy for an economy with such enormous potential that the only consolation to be gained from all this is that things can't get much worse for taxpayers.
Dec 05, 2013 Nigeria: upside down and inside outAnother country (just on my side of the equator but still pretty hot) where nothing is what it seems, and they are going to increase taxes on imported cars in order to encourage vehicle sales (work that one out, if you can), is Nigeria. Do you get a warranty on a car that has been taken to pieces in order to get it through customs and reassembled in a local shed by untrained cowboys? Good luck to you, indeed. I warned you about that hat.
Oct 10, 2013 Nigeria: fly awaySkipping across the Atlantic, and up a bit, we come to Nigeria, another mis-governed, basket-case state blessed (or cursed) with natural riches. We won't be taking a private jet, though, because the Government will charge us USD4,000 to leave again. Presumably the Government's thinking is that, since it can't seem (or doesn't want) to control wholesale stealing of oil and gas revenues, at least it can profit from the multiplicity of private jet purchases that the stealing enables. And that brings me to hats, the wearing of same, that is, because you-know-who is rarely seen hatless. It's a kind of trademark, that hat, but for me, there is something sinister about it, not just because it carries echoes of Chicago underworld mobsters and the Ton-Ton Macoute, but because one of the generalizations (OK, prejudices) that my father bequeathed to me was against men wearing hats. OK, from the 17th to the 19th centuries everyone wore hats, at first in the street, for obvious reasons, and then by 1890 as part of the uniform disguise which men hid behind. But by 1950 hats had become an oddity, although still worn by soldiers and policemen (making Dad's point). Women's hats, then? Well that's for another time, I've used up my word count for today; but just consider the word "fascinator."