Nigeria to begin taxing first and business class air tickets as government steps up revenue drive

NIGERIA is to begin taxing first and business class airline tickets soon as part of the government's continued drive to increase its revenue pool and end its dependency on crude oil export income.

Currently, Nigeria has one of the lowest gross domestic product (GDP) to tax ratio's in the world of just 6%, increasing the government's dependence on oil export revenue In a bid to address the issue, finance minister Kemi Adeosun has announced ambitious plans to tax first and business class flight tickets in line with the new tax drive aimed at boosting revenue.

Ms Adeosun said: "We signed something yesterday on luxury goods including champagne, brandy, whiskey, wine, jewellery and high-end jewellery. We’ve signed something that will bill access charge on first class and business class tickets and we are just doing the final part of the implementation.

 "We also want to try and amend the tax payer book on high-end cars, luxury cars. If we move our tax-to-GDP ratio up, it means we will be able to provide more services to our people as many of the things we are not able to do are a function of the fact that we don’t have enough money."

She added that the government needs to build more schools, hospitals and roads and it is not rocket science to realise that inadequate revenue is the cause of the problem. According to Mrs Adeosun, every country has challenges and there is nothing Nigeria is facing that other countries have not faced before.

“Every poor nation has very poor tax compliance rate and every rich nation has high compliance rate. So we want to be a prosperous nation and if everybody pays, there will be far more money in the pool to be spent on the services that we need.

“We could do so much more in the economy if we had the money. If our public school system improves, many people who are currently paying school fees will move their children back into the public schools,” Ms Adeosun added.

She noted that a lot of people that were very successful today were educated in public schools because such schools were good and a lot of people die needlessly because Nigeria does not have the right health facilities. However, she clarified that Nigerians living and working abroad and paying taxes in those countries do not have to pay taxes in Nigeria.