In all countries, tax and Gross Domestic Product are related, since a higher GDP will automatically lead to a higher tax collection. A higher GDP indicates that there has been an increased overall development in the country thereby increasing per capita income.
To close this gap between income and expenditure, the Nigerian government needs more revenue, which it can get from tax revenues. Sadly though, the tax to GDP ratio in Nigeria is low.
Owing to this, the Minister of Finance, Mrs Kemi Adeosun, says the Federal Government has signed a policy to tax first class and business class air tickets alongside other luxury goods.
She said: “If we move our tax-to-GDP (gross domestic product) ratio up, it means two things: one, we will be able to provide more services to our people. Many of the things we are not able to do are function of the fact that we don’t have enough money.
Fielding questions yesterday via Facebook, the minister was asked what her thoughts were on taxing first class tickets and luxury coaches, and she said: “I think yes; we signed something yesterday on luxury goods: champagne, brandy, whiskey, wine, jewelry, high-end jewelry.
“We’ve signed something that will bill access charge on first class and business class tickets, we are just doing the final parts of the implementation and we also want to try and amend the tax payer book on high end cars, luxury cars.”
Adeosun assured that the taxes will be funnelled into turning Nigeria into what it used to be and even better, adding that it will help in remodelling the country’s public infrastructure.
“We need to build more schools, we need to build more hospitals, we need to build more roads. This is not rocket science. Every country has challenges, there is nothing we are facing that other countries haven’t faced.”
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