The lawmaker representing Ondo South Senatorial District, Senator Jimoh Ibrahim, has called for the introduction of taxes on luxury items, stating that rich Nigerians do not pay enough taxes.
Speaking to the Senate Press Corps on Tuesday after plenary, Ibrahim emphasized that it is a global practice for governments to impose heavier taxes on wealthier citizens during economic crises in order to help lift the nation out of financial challenges.
Ibrahim was providing clarification on his earlier intervention during the consideration of the joint committees’ report on Finance, National Planning, and Economic Affairs regarding the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper. He argued that it would be the first time Nigeria directly taxes the net worth of its wealthiest citizens, noting that such a move would significantly strengthen the country’s revenue base, according to Daily Post.
The senator expressed concern that Nigeria’s wealthy population does not contribute enough to the national tax pool. He pointed out that in many other countries, taxes are levied on transactions, and he believes a similar approach could help reduce the economic gap in Nigeria. Ibrahim specifically highlighted the potential of a luxury tax to increase revenue and called for a robust system to monitor and enforce these taxes.
To ensure effectiveness, Ibrahim stressed the need for an accurate data bank of taxable wealthy individuals. He noted that while Nigeria’s GDP-to-tax ratio is currently at 18 percent, a staggering 72 percent of the population remains outside the tax net. He described this as an unfortunate situation for the country’s economy, underscoring the need for broader tax coverage to improve national revenue.
“My worry is that the rich in Nigeria are not paying enough taxes in order to be a good jolly fellow with the poor.
“In other countries, taxes are paid on transactions. The rich need to pay more taxes and one of the areas where our economic gap can be covered is when we address those lacuna.
“Luxury taxes should be monitored and collected. We should look at a law that will police transactional tax on the rich,” he said.
To make this effective, he said “there should be an adequate data bank of the taxable rich”.
“GDP to tax ratio in Nigeria is 18 percent, while the test 72 percent are not taxed.
“It is unfortunate economically that 72 percent of the Nigerian population are not in the tax net,” he added.
