Osinbajo warns that many Nigerians cannot afford to pay tax as a result of Covid-19 lockdown

VICE president Professor Yemi Osinbajo has warned that Nigeria is facing an additional economic challenge of reduced income from taxation as the coronavirus pandemic has left many Nigerians in a position whereby they can no longer afford to pay tax.

Following the outbreak of the pandemic, a economic shutdown that involved the closing of businesses, markets and the imposition of a travel ban, created severe hardship across Nigeria. Apart from this, global demand for Nigeria's crude oil all but ceased, leaving the country with millions of barrels of petroleum it could not sell.

Given that about 95% of Nigeria's federal government revenue comes from the receipt of crude oil, the country has been unable to fund her 2020 budget, forcing the government to approach the World Bank and International Monetary Fund for loans. To ameliorate the effects of the shutdown, the federal government set up an Economic Sustainability Committee (EAC) chaired by Professor Osinbajo, which recently recommended a radical resuscitation plan.

yesterday, however, Professor Osinbajo lamented the negative impact of the Covid-19 pandemic on the nation’s economy, saying only a few Nigerians can now afford to pay taxes. In a message he sent to the 11th Synod of the Church of Nigeria, Abuja Diocese, the vice president noted that with the pandemic, Nigeria’s economy faces its worst period in history.

Professor Osinbajo  said: “Everything around us has been shaken and is being shaken by the greatest global threat to mankind in a century. We are in the midst of the greatest economic slump in history and every region of the world is experiencing an unprecedented slowdown in growth.

“There was a day in April when oil, our precious oil, was selling for less than the cost of production and no one was even willing to buy.  Suddenly, all we took for granted, from air travel to hugs and even handshakes, have become neither safe nor advisable.

“Our own economy faces its worst period in history. We are earning 40% less than we should because oil prices have fallen and few today can afford to pay taxes.”

Also, Professor Osinbajo said the lesson in the past few months was that human ingenuity and planning could not assure people that they would live to see the next day. Professor Osinbajo's resuscitation plan, called Bouncing Back: The Nigerian Economic Sustainability Plan, outlined a range of multi-sectoral remedies to take care of massive jobs creation through the agricultural and construction sectors, as well as lending support to the informal and small scale business sectors.