Nigeria Reaching Maximum Borrowing Capacity- El-Rufai

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By Mukwuzi Joseph

Governor Nasir el-Rufai of Kaduna State has raised the alarm that the country has almost reached its maximum capacity to borrow. He said that with the collapse of the crude oil prices, the nation should be more proactive to avoid external shocks.

The governor, who spoke yesterday at the 22nd Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) held in Lagos, said the country should start developing tax extraction capacity and create an effective tax system that influences structural change.

El-Rufai lamented the low rate of tax collection in the country while delivering his keynote address at the 22nd Annual Tax Conference of the Chartered Institute of Taxation of Nigeria, with the theme ‘Taxation and economic competitiveness: Imperatives for national development’.

He said, “Only a minority of Nigerians pay income tax, and the majority of this tiny minority are persons whose taxes are deducted at source, formal sector employees, public servants and the like.

“Perhaps as a result of colonial experience, we have been living in a country where paying taxes is treated as an illegitimate imposition. Voluntary compliance with the obligation to pay income tax remains a challenge.”

According to him, many state governments and the Federal Government are not collecting as much tax as they should.

El-Rufai said, “The total internally generated revenues by states are currently less than one per cent of the GDP, despite the fact that Nigeria’s current fiscal federalism framework allows states and local governments to collect many taxes, levies and fees.




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