Nigerians Bear a Huge ‘Implicit Tax Burden,’ Adesina Says

By Bashir Olanrewaju

Nigerian authorities should be careful about increasing taxes on their citizens since they already bear one of the highest “implicit tax burdens” in the world, President of the African Development Bank Akin Adesina said.

Adesina, who spoke during a webinar on taxation on Thursday organized by the Federal Inland Revenue Service, said Nigeria’s low tax-to-GDP ratio compared with other African countries, don’t provide justification for increasing taxes.

“Truth be told, Nigerians pay one of the highest implicit tax rates in the world — way higher than developed countries,” he said. “Think of it: they provide electricity for themselves via generators; they repair roads to their neighborhoods, if they can afford to; there are no social security systems; they provide security for their own safety; and they provide boreholes for drinking water with their own monies.”

The AfDB president explained that nominal taxes are those charged directly by the government,  while nominal taxes are those borne by citizens in providing themselves basic services that should be the responsibility of the government. 

The easiest route to winning over citizens to pay more taxes is through good governance,  according to Adesina. 

“Good governance is the ‘speed dial’ for greater tax payments,” he said. “The role of the government is not just to collect taxes; its role is to ensure that the taxes are collected transparently, used transparently and responsibly; and that citizens see what their taxes are being used for.”