Nigerian governors target 200% increase in tax revenues

State governors in Nigeria are targeting a 200 percent increase in the country's aggregate tax revenue through a collaboration with the Joint Tax Board on an initiative called Data for Tax. Chamberlain Peterside, CEO of Xcellon Capital Advisors, joined CNBC Africa to discuss this new plan and its potential impact. Peterside expressed optimism about the initiative, citing recent advancements such as the national ID number and phone number registration as tools to create a more robust taxpayer database. He highlighted the potential for the Data for Tax initiative to leverage these platforms to expand the tax net and improve tax compliance. One of the key challenges for the Nigerian government has been the low tax to GDP ratio, which currently stands at around 8%. Peterside believes that leveraging data can help address this issue by enabling the government to identify more taxpayers and increase tax revenue. While achieving a 200% increase in tax revenue may be ambitious, Peterside sees the initiative as a step towards significant improvements in tax compliance and revenue generation. The Data for Tax initiative aligns with the Finance Act of 2021, which aims to increase government revenues and reform the country's tax system. Peterside emphasized the importance of using technology to identify taxpayers, including non-resident entities conducting business online. By enhancing tax identification and transaction tracking capabilities, the government can boost revenue generation and improve overall tax compliance. The initiative also aims to expand the country's tax net to include at least 90% of all eligible taxpayers. While initial efforts may focus on the formal sector, Peterside highlighted the importance of eventually capturing the informal sector, which plays a significant role in the Nigerian economy. By issuing national identification numbers to a majority of the population, including those in the informal sector, the government can enhance revenue collection and drive GDP growth. Overall, the collaboration between state governors and the Joint Tax Board on the Data for Tax initiative represents a proactive step towards improving tax revenues in Nigeria. By leveraging data and technology to enhance tax identification and compliance, the government aims to broaden the tax base and boost revenue generation. While challenges may persist, Peterside remains optimistic about the potential for significant progress in tax reform and revenue generation in the coming years.