₦airaland Forum

Taxation determines national prosperity or wealth more than production

People tend to argue that all you need as a country is to develop your economy and have many things to sell to the foreign market and you will be a rich nation. Meaning you have to develop things like your industrial capacity and manufacturing output before you can be a rich nation

This can be shown to be not true and the main reason is that a major part of being considered rich as a country is HDI and no country can substantially increase it's HDI without increasing it's level of investment in it's human resources and no nation can substantially increase the quality of it's human resources without substantially increasing it's government revenue to GDP ratio by whatever means but preferably via taxation as that is the only sustainably viable path.

Brazil for example have some capacity in technology that only a few nations have. They have capacity in jet engine production as an example. Pakistan have capacity in the semi conductor sector and if you search you will find more countries that are not rich but that have exceptional technological capacity and what will be common to them all is a low government revenue to GDP ratio. On the other hand you will find countries who are not exporting any technology at all or who are not exporting any significant technological product but are favorite destinations for immigrant workers from across the globe and what will be common to them will be a high government revenue to GDP ratio. Examples are Australia, Canada and many others.

So no matter the technological knowhow domiciled in your country and no matter the industrial capacity present and etc, your country will still be poor if it is without a high enough level of taxation. You will be poor without a high enough government revenue to GDP ratio

You tax wealth not poverty

There are a host of countries that don’t tax their citizens.

Wealth of a country is not determined by how much revenue the government generates alone but how much contribution the people make.

You tax wealth, not poverty.

The kind of taxation we have here in Nigeria is similar to the ones we had before the colonial period where Kings (Oyo Empire as case study) impose taxes on its people and other neighboring states. They don’t care how you make money, poor or rich, you will be forced to pay tax so the King and his Kingdom can feed fat.

Sheuns:
There are a host of countries that don’t tax their citizens.

Wealth of a country is not determined by how much revenue the government generates alone but how much contribution the people make.

You tax wealth, not poverty.

The kind of taxation we have here in Nigeria is similar to the ones we had before the colonial period where Kings (Oyo Empire as case study) impose taxes on its people and other neighboring states. They don’t care how you make money, poor or rich, you will be forced to pay tax so the King and his Kingdom can feed fat.

This the problem with Nigeria, they are bringing their traditional way of life, culture and tradition to the national scene and forcing down on everyone throat!

lawani:
Taxation determines national prosperity or wealth more than production

People tend to argue that all you need as a country is to develop your economy and have many things to sell to the foreign market and you will be a rich nation. Meaning you have to develop things like your industrial capacity and manufacturing output before you can be a rich nation

This can be shown to be not true and the main reason is that a major part of being considered rich as a country is HDI and no country can substantially increase it's HDI without increasing it's level of investment in it's human resources and no nation can substantially increase the quality of it's human resources without substantially increasing it's government revenue to GDP ratio by whatever means but preferably via taxation as that is the only sustainably viable path.

Brazil for example have some capacity in technology that only a few nations have. They have capacity in jet engine production as an example. Pakistan have capacity in the semi conductor sector and if you search you will find more countries that are not rich but that have exceptional technological capacity and what will be common to them all is a low government revenue to GDP ratio. On the other hand you will find countries who are not exporting any technology at all or who are not exporting any significant technological product but are favorite destinations for immigrant workers from across the globe and what will be common to them will be a high government revenue to GDP ratio. Examples are Australia, Canada and many others.

So no matter the technological knowhow domiciled in your country and no matter the industrial capacity present and etc, your country will still be poor if it is without a high enough level of taxation. You will be poor without a high enough government revenue to GDP ratio

All develop nation with high taxes have a form of incentive for it citizens.

Nigerians run abroad where they pay high taxes because those nations provide enabling environment, job security, security, health and educational support to her people.

From the headline alone, it is evident that whoever wrote this article is an illiterate. There is a reason why Gross National Production (GBP) and Gross Domestic Production (GDP) are used to measure wealth of countries. But I'm sure this lazy writer can't be bothered to put in the basic work required to post this detritus that he calls an article.

Pakistan has capacity in semi conductor production? Are they aware? What ignorant nonsense is this?

Sheuns:
There are a host of countries that don’t tax their citizens.

Wealth of a country is not determined by how much revenue the government generates alone but how much contribution the people make.

You tax wealth, not poverty.

The kind of taxation we have here in Nigeria is similar to the ones we had before the colonial period where Kings (Oyo Empire as case study) impose taxes on its people and other neighboring states. They don’t care how you make money, poor or rich, you will be forced to pay tax so the King and his Kingdom can feed fat.

Don't just say there are many countries. List those countries considered rich and successful whose government spending per annum is not above fifteen percent of the GDP and if your spending have to be high relative to your GDP, where are you supposed to get the money from?

Dogalmighty17:
From the headline alone, it is evident that whoever wrote this article is an illiterate. There is a reason why Gross National Production (GBP) and Gross Domestic Production (GDP) are used to measure wealth of countries. But I'm sure this lazy writer can't be bothered to put in the basic work required to post this detritus that he calls an article.

Pakistan has capacity in semi conductor production? Are they aware? What ignorant nonsense is this?

Mr Literate man. You hide under anonymity to spew rubbish. You use terms without understanding them and you dismiss genuine effort as lazy work

On Pakistan, from under which rock did you crawl out?

lawani:
Taxation determines national prosperity or wealth more than production

People tend to argue that all you need as a country is to develop your economy and have many things to sell to the foreign market and you will be a rich nation. Meaning you have to develop things like your industrial capacity and manufacturing output before you can be a rich nation

This can be shown to be not true and the main reason is that a major part of being considered rich as a country is HDI and no country can substantially increase it's HDI without increasing it's level of investment in it's human resources and no nation can substantially increase the quality of it's human resources without substantially increasing it's government revenue to GDP ratio by whatever means but preferably via taxation as that is the only sustainably viable path.

Brazil for example have some capacity in technology that only a few nations have. They have capacity in jet engine production as an example. Pakistan have capacity in the semi conductor sector and if you search you will find more countries that are not rich but that have exceptional technological capacity and what will be common to them all is a low government revenue to GDP ratio. On the other hand you will find countries who are not exporting any technology at all or who are not exporting any significant technological product but are favorite destinations for immigrant workers from across the globe and what will be common to them will be a high government revenue to GDP ratio. Examples are Australia, Canada and many others.

So no matter the technological knowhow domiciled in your country and no matter the industrial capacity present and etc, your country will still be poor if it is without a high enough level of taxation. You will be poor without a high enough government revenue to GDP ratio

This exactly is what I have found out especially in most advanced nations.
Lagos is also an example amongst all the states.Nigeria will be richest nation in Africa in 2027 and by 2030,Nigeria will achieve its $1trillion Economy with the way the economy is growing at 4.1 to 4.5 according to IMF,WB etc.
Alll advanced countries take taxes serious than even production because it is sustainable.
Good tax regime bears production in the short and long run.

VeeVeeMyLuv:
You tax wealth not poverty

That is why Tinubu exempted 80% of the masses from direct tax.

Putinofrussia:
This exactly is what I have found out especially in most advanced nations.
Lagos is also an example amongst all the states.Nigeria will be richest nation in Africa in 2027 and by 2030,Nigeria will achieve its $1trillion Economy with the way the economy is growing at 4.1 to 4.5 according to IMF,WB etc.
Alll advanced countries take taxes serious than even production because it is sustainable.
Good tax regime bears production in the short and long run.

One trillion dollars GDP is around four thousand dollars per annum to be spent per head in Nigeria including children. That is like six million naira meaning the average five member household of two parents and three children will have an income of thirty million naira per annum. Do you really think Nigeria needs up to that to be ok? You can't be using foreign countries with high cost of living to judge

lawani:
One trillion dollars GDP is around four thousand dollars per annum to be spent per head in Nigeria including children. That is like six million naira meaning the average five member household of two parents and three children will have an income of thirty million naira per annum. Do you really think Nigeria needs up to that to be ok? You can't be using foreign countries with high cost of living to judge

Don't we also have high cost of living now?
The only way to mitigate Nigerians' suffering of more than 5 decades is for the Economy to grow even faster than the population is growing.
A strong economy creates the conditions to mitigate the suffering of the people because it is going to drive job creation, increase government tax revenues, and raise living standards.This however depends heavily on robust social policies and wealth distribution, if I may add.
To address your points,an economy of $1 trillion divided equally among 250 million people results in a GDP per capita of $4,000. This places Nigeria in the lower-middle-income category, still suggesting that we are a developing economy,only basic needs are met but discretionary spending and advanced infrastructure remain limited.

Putinofrussia:
Don't we also have high cost of living now?
The only way to mitigate Nigerians' suffering of more than 5 decades is for the Economy to grow even faster than the population is growing.
A strong economy creates the conditions to mitigate the suffering of the people because it is going to drive job creation, increase government tax revenues, and raise living standards.This however depends heavily on robust social policies and wealth distribution, if I may add.
To address your points,an economy of $1 trillion divided equally among 250 million people results in a GDP per capita of $4,000. This places Nigeria in the lower-middle-income category, still suggesting that we are a developing economy,only basic needs are met but discretionary spending and advanced infrastructure remain limited.

You are using terminology that isn't useful in the Nigerian context. No country needs up to 4000 dollars per Capita income if the cost of living crisis ravaging the global economy is addressed and the cost of living crisis do not affect all countries to the same degree. You need to sit down and calculate how much a Nigerian family in a typical Nigerian city need to live well. It is a country by country issue. A 20k dollar per annum wage in Ibadan is a CEO wage while it is less than minimum wage in another country.

lawani:
You are using terminology that isn't useful in the Nigerian context. No country needs up to 4000 dollars per Capita income if the cost of living crisis ravaging the global economy is addressed and the cost of living crisis do not affect all countries to the same degree. You need to sit down and calculate how much a Nigerian family in a typical Nigerian city need to live well. It is a country by country issue. A 20k dollar per annum wage in Ibadan is a CEO wage while it is less than minimum wage in another country.

Yes and this is still because we have a weak economy.If Tinubu had not removed subsidy,the minimum wage will still be around #30,000 which is a few dollar and most states will still not be able to pay salaries.
We can partly emulate the USA because it relies on a massive domestic market and a highly skilled workforce. Nigeria has the population to achieve similar domestic consumption scale if purchasing power is improved.
The US economic engine thrives on robust credit accessibility. Tinubu's disinflation and growth acceleration strategy...DGAS....and the consumer credit systems aim to shift the economy from being purely cash-based to one driven by scaled consumption and investment.I think we can still do it.
It is doable.Our gdp fell to around $187 billion dollar in 2024/25,today It has grown to $377 billion according to IMF.
I am sure we will hit the $1 trillion dollar mark by 2030 and it will be a prosperous Nigeria.

Putinofrussia:
That is why Tinubu exempted 80% of the masses from direct tax.

I hope you know there is nowhere such happened and it led to prosperity for the majority? Even places where one hundred percent don't pay personal income tax like the USA still have everybody paying payroll tax which in itself is a form of personal income tax.

What leads to prosperity is to fix minimum wage high enough to be taxed and enforce it on all employers. However it can only be done by the states government and not the federal. All the federal can do is to double down on VAT and CIT collection

lawani:
I hope you know there is nowhere such happened and it led to prosperity for the majority? Even places where one hundred percent don't pay personal income tax like the USA still have everybody paying payroll tax which in itself is a form of personal income tax.

What leads to prosperity is to fix minimum wage high enough to be taxed and enforce it on all employers. However it can only be done by the states government and not the federal. All the federal can do is to double down on VAT and CIT collection

Just in a little while,the minimum wage will be hiked to around #100,000, according to the governors and a lot of people will automatically enter the tax net and President Tinubu had agreed with labour to continually review the minimum wage every three years.You sure know what this will do to govt revenue, Economy and the masses.
Most advanced nations do not play with tax because it is their most sustainable form of revenue.God actually ordained tax in the Bible and the Quran.
To me,the tax thing is the most formidable of the reforms by President Tinubu.

Putinofrussia:
Just in a little while,the minimum wage will be hiked to around #100,000, according to the governors and a lot of people will automatically enter the tax net and President Tinubu had agreed with labour to continually review the minimum wage every three years.You sure know what this will do to govt revenue, Economy and the masses.
Most advanced nations do not play with tax because it is their most sustainable form of revenue.God actually ordained tax in the Bible and the Quran.
To me,the tax thing is the most formidable of the reforms by President Tinubu.

Yes the FG is trying. It is the states and local governments that are doing relatively nothing. If the states were to do the right thing, their total revenue will be more than the Federal revenue. The FG can do more though because VAT and CIT collection should vary directly with the population of the state

[quote author=lawani post=139942718]Yes the FG is trying. It is the states and local governments that are doing relatively nothing. If the states were to do the right thing, their total revenue will be more than the Federal revenue. The FG can do more though because VAT and CIT collection should vary directly with the population of the state[/quote
Ok

lawani:
Yes the FG is trying. It is the states and local governments that are doing relatively nothing. If the states were to do the right thing, their total revenue will be more than the Federal revenue. The FG can do more though because VAT and CIT collection should vary directly with the population of the state

On the other hand,the mandatory wage hike to #100,000 would significantly increase the operating expenses of small and large businesses alike.
Higher wage bills compress corporate profit margins. Since corporate income tax is calculated based on net profits, a mandatory wage hike could actually reduce the total to ax collected by the NRS by the end of the fiscal year.
The federal and state governments will have to reallocate vast amounts of their budgets toward funding the bloated public civil service wage bill, leaving less room for the capital investments that drive taxable economic activity.
To hit the #40 trillion mark, the FG must have to rely entirely on its automation tools, multinational compliance, and non-oil corporate auditing rather than the pockets of workers.

Sheuns:
There are a host of countries that don’t tax their citizens.

Wealth of a country is not determined by how much revenue the government generates alone but how much contribution the people make.

You tax wealth, not poverty.

The kind of taxation we have here in Nigeria is similar to the ones we had before the colonial period where Kings (Oyo Empire as case study) impose taxes on its people and other neighboring states. They don’t care how you make money, poor or rich, you will be forced to pay tax so the King and his Kingdom can feed fat.

You and your communist rhetoric. The bolded makes no sense because only individuals who work pay tax with rate matching their level of income.

You simply retrofit every of your argument because of a desperation to gaslight the Tinubu Government you dislike intensely.

I've lived in the UK majority of my life and know the nation works well because of taxes. No nation, unless purely communist, can be optimally efficient without taxes that must also be collected efficiently.

Britain has the National health Service scheme which is effectively free healthcare for Britons but it is maintained partly via national insurance contributions all British workers pay from their monthly salary.

Payment of tax is essential. I'd advise you stop being emotional to then rush to post when you can do seconds of research to note what expert and authoritative knowledge defines.

Tinubu is a genius and his drive to collect tax more efficiently is crucial because Nigeria's tax to GDP ratio is below the recommended level putting more pressure on government to fund literally everything whereas, due to no fault of PBAT, we have virtually an undiversified and mono-economy centred around crude oil earnings.

VeeVeeMyLuv:
You tax wealth not poverty

Another poster made this same comment and it is inane and an oxymoron.

There is no way to tax poverty because you can only tax those who have jobs and/or are earning.

Putinofrussia:
On the other hand,the mandatory wage hike to #100,000 would significantly increase the operating expenses of small and large businesses alike.
Higher wage bills compress corporate profit margins. Since corporate income tax is calculated based on net profits, a mandatory wage hike could actually reduce the total to ax collected by the NRS by the end of the fiscal year.
The federal and state governments will have to reallocate vast amounts of their budgets toward funding the bloated public civil service wage bill, leaving less room for the capital investments that drive taxable economic activity.
To hit the #40 trillion mark, the FG must have to rely entirely on its automation tools, multinational compliance, and non-oil corporate auditing rather than the pockets of workers.

If 100k is the least that can bear tax then there is nothing wrong in enforcing 100k on the private sector, on all employers but some companies can apply to pay lower because all cities don't have the same cost of living. However no matter how much a worker is paid, they should still pay tax so far the government is mediating for them and not leaving them to the market forces. It is wrong to exempt anyone earning income from paying taxes

TopBanter:
You and your communist rhetoric. The bolded makes no sense because only individuals who work pay tax with rate matching their level of income.

You simply retrofit every of your argument because of a desperation to gaslight the Tinubu Government you dislike intensely.

I've lived in the UK majority of my life and know the nation works well because of taxes. No nation, unless purely communist, can be optimally efficient without taxes that must also be collected efficiently.

Britain has the National health Service scheme which is effectively free healthcare for Britons but it is maintained partly via national insurance contributions all British workers pay from their monthly salary.

Payment of tax is essential. I'd advise you stop being emotional to then rush to post when you can do seconds of research to note what expert and authoritative knowledge defines.

Tinubu is a genius and his drive to collect tax more efficiently is crucial because Nigeria's tax to GDP ratio is below the recommended level putting more pressure on government to fund literally everything whereas, due to no fault of PBAT, we have virtually an undiversified and mono-economy centred around crude oil earnings.

.Don't disparage communist nations as non tax paying as that isn't true. They all work for government. They produce for government and the excess they produce is the tax they pay. This excess is used in whatever way the government desires. What tax can be more than that? The limit of their entrepreneurship is petty trading and that was their only fault. If a communist country embraces the free market, the system would be near perfect and that is close to what China did. The major step left is to eradicate class which can only be done by providing financial security to all workers and the only way is pension funds

Putinofrussia:
On the other hand,the mandatory wage hike to #100,000 would significantly increase the operating expenses of small and large businesses alike.
Higher wage bills compress corporate profit margins. Since corporate income tax is calculated based on net profits, a mandatory wage hike could actually reduce the total to ax collected by the NRS by the end of the fiscal year.
The federal and state governments will have to reallocate vast amounts of their budgets toward funding the bloated public civil service wage bill, leaving less room for the capital investments that drive taxable economic activity.
To hit the #40 trillion mark, the FG must have to rely entirely on its automation tools, multinational compliance, and non-oil corporate auditing rather than the pockets of workers.

The FG can not get anything directly from workers since they have no right to PAYE but whatever the state gets will rub off on the FG because any business filing PAYE returns must automatically file VAT and CIT as well and this includes all businesses from restaurants to farms to barber shops to fashion designers etc. Therefore VAT and CIT will be proportional to the population if collection were efficient. Oyo, Kano, Ogun etc will pay far more VAT and CIT than Rivers under normal circumstances

This is a colonialist or feudalist mindset

TopBanter:
Another poster made this same comment and it is inane and an oxymoron.

There is no way to tax poverty because you can only tax those who have jobs and/or are earning.

You summarily assume that all those who work are not poor
Do you mean 63% of Nigerians are jobless?

Putinofrussia:
Just in a little while,the minimum wage will be hiked to around #100,000, according to the governors and a lot of people will automatically enter the tax net and President Tinubu had agreed with labour to continually review the minimum wage every three years.You sure know what this will do to govt revenue, Economy and the masses.
Most advanced nations do not play with tax because it is their most sustainable form of revenue.God actually ordained tax in the Bible and the Quran.
To me,the tax thing is the most formidable of the reforms by President Tinubu.

Where did God ordain tax on the Bible pls

Kukutente23:
You summarily assume that all those who work are not poor
Do you mean 63% of Nigerians are jobless?

There is no country where all workers are living in luxury but if government brokers a minimum wage for workers then they have a right to collect personal income tax. I guess that should be easy to align with

TopBanter:
You and your communist rhetoric. The bolded makes no sense because only individuals who work pay tax with rate matching their level of income.

You simply retrofit every of your argument because of a desperation to gaslight the Tinubu Government you dislike intensely.

I've lived in the UK majority of my life and know the nation works well because of taxes. No nation, unless purely communist, can be optimally efficient without taxes that must also be collected efficiently.

Britain has the National health Service scheme which is effectively free healthcare for Britons but it is maintained partly via national insurance contributions all British workers pay from their monthly salary.

Payment of tax is essential. I'd advise you stop being emotional to then rush to post when you can do seconds of research to note what expert and authoritative knowledge defines.

Tinubu is a genius and his drive to collect tax more efficiently is crucial because Nigeria's tax to GDP ratio is below the recommended level putting more pressure on government to fund literally everything whereas, due to no fault of PBAT, we have virtually an undiversified and mono-economy centred around crude oil earnings.

I dislike the Tinubu administration because it’s the worst to have hit Nigerians in all its existence.

It’s a known fact that this administration has thrown way more people into poverty than any before it and they’re unapologetic about it.

Never have I said taxation is bad, but if the government cannot account for the revenue it generates from sale of minerals and oil and even the taxes it’s collecting why would you come to tell citizens to pay more taxes before they get services?

The same citizens you have failed to improve their standard of living are who you expect to pay taxes? Same taxes that the corrupt politicians you support loot and spend at will on their lavish lifestyles?

The UK you mentioned, how many of their politicians (PM and all) buy luxury SUVS for themselves every 4 years? How many depend on the government to feed, clothe and even house them, pay their domestic staff and multitude of aides they employ?

If you want to compare to the UK, ensure your politicians start emulating not only the taxes paid in the UK but also how public servants work for their citizens over there.

Until then, I’ll stand by what I said, you cannot tax poverty. Improve the lives of the people and see if they won’t pay taxes.

Sheuns:
I dislike the Tinubu administration because it’s the worst to have hit Nigerians in all its existence.

It’s a known fact that this administration has thrown way more people into poverty than any before it and they’re unapologetic about it.

Never have I said taxation is bad, but if the government cannot account for the revenue it generates from sale of minerals and oil and even the taxes it’s collecting why would you come to tell citizens to pay more taxes before they get services?

The same citizens you have failed to improve their standard of living are who you expect to pay taxes? Same taxes that the corrupt politicians you support loot and spend at will on their lavish lifestyles?

The UK you mentioned, how many of their politicians (PM and all) buy luxury SUVS for themselves every 4 years? How many depend on the government to feed, clothe and even house them, pay their domestic staff and multitude of aides they employ?

If you want to compare to the UK, ensure your politicians start emulating not only the taxes paid in the UK but also how public servants work for their citizens over there.

Until then, I’ll stand by what I said, you cannot tax poverty. Improve the lives of the people and see if they won’t pay taxes.

You can't tax poverty but if you fix salary for someone then you rank as a wage broker and you have the full right to collect commissions from such wages.

The vultures are swarming again bringing sad tidings

Kukutente23:
Where did God ordain tax on the Bible pls

God explicitly commanded a poll tax or population-based tax in Exodus 30:11-16, where every man over 20 years old had to pay half a shekel. This money was ordained to fund the service of the Tabernacle and the Temple.

The tithe, the levitical system functioned as a tax structure to provide for the tribe of Levi, who performed spiritual duties but held no land inheritance of their own .......Numbers 18:21-24.

Civil tribute,secular or governmental taxes were also recognized by God.
For instance, in Genesis 47:26, Joseph instituted a mandate in Egypt where Pharaoh collected a fifth (20%) of the produce.