‘We Are Not Taxing Poverty, We Are Taxing Prosperity’ — Adedeji 

The Nigeria Revenue Service (NRS) is not focused on extracting more taxes from struggling Nigerians and businesses but on creating an economy in which prosperity can generate higher revenue, its chairman, Zacch Adedeji, has said.

Adedeji said the government’s tax policy was designed around the principle of taxing economic returns rather than discouraging investment, insisting that the revenue service’s interest was ultimately tied to the success of businesses and individuals.

Speaking yesterday on Sunday Politics, a weekly Programme of Channels TV, he noted that the NRS would benefit more from an economy in which businesses expand and individuals earn more than from a system that places excessive tax burdens on struggling enterprises.

He explained that increasing government revenue therefore required creating conditions that would enable businesses to increase their earnings.

“If I want to make more, I must work for you to make more,” he added.

Adedeji said this principle was behind the administration’s efforts to remove obstacles to investment and improve the business environment.

He cited the consolidation of Nigeria’s numerous taxes as part of the reforms, saying the country had moved from a system with 66 separate tax laws to a single consolidated tax law.

He argued that reducing the number of taxes and simplifying the system would make compliance easier and encourage businesses to invest and expand.

The NRS chairman also rejected criticism that the government’s increasing revenue collections showed that Nigerians were being squeezed harder through taxation.

He said increased revenue should instead be viewed alongside the expansion of economic activity, arguing that higher collections could result from businesses generating more income rather than simply from higher tax rates.

He also defended the government against criticism that rising revenues had not translated into sufficient improvement in household welfare.

According to him, revenue collected by the NRS should not be interpreted as money belonging solely to the Federal Government because a significant proportion of federally collected revenue is distributed among the three tiers of government.

He noted, for instance, that about 90 per cent of Value Added Tax (VAT) revenue goes to states.

Adedeji said the government was also pursuing reforms in electricity, infrastructure and other productive sectors to create the conditions required for businesses to expand.

He maintained that the ultimate objective was to build an economy capable of generating sustainable prosperity rather than one dependent on extracting revenue from citizens.

“We are here to tax prosperity,” he said.