Nigeria’s Minister of Finance says government will soon begin to tax luxurious consumption by the rich people

Authors:

shakirudeen taiwo

October 16, 2017 5:34 PM

This is to ensure equitable distribution of wealth and resources in the country.

The Federal government of Nigeria (FGN) has hinted that it would soon begin taxing the wealthy people for luxurious consumption in the country.

This disclosure was made by Nigeria's minister of finance, Mrs Kemi Adeosun while addressing pressmen at the sideline of the annual meetings of the World Bank and International Monetary Fund (IMF) in Washington DC.

“In any tax system, the burden must be borne by anybody whose income allows to bear it, so those with higher income should by definition, bear a greater part of the burden,” Adeosun said.

“The rich are obligated to pay, and this has nothing to do with whether taxing the rich will increase public revenue or not.”

“The problem currently is that those at the lower level are the ones paying. If the man in the traffic control, with little income will pay at source, why should we not pursue the billionaire or the trillionaire to pay out of the income? We need to change the mindset in the country with regards to the tax system.”

Mrs Adeosun further explained that other West African countries are also considering implementing similar tax policy.

“The luxury tax planned by the federal government is being finalized now because it cuts across the ECOWAS. There is a legal process you must go through, including the Customs union to actually vary the specific taxes,” she said.

The proposed luxury tax is modelled after a sales tax or value-added tax (VAT) which are charged as a percentage of the value of some items. However, this tax would only apply to purchases over a certain amount and on some items such as cars, jewellery, and wine among others.

She stated that: “I have encouraged every governor that everyone who comes to declare should be given enough time to pay up. This is because the amount of tax that they would have to pay is big.”

Authors:

shakirudeen taiwo