How Nigeria Can Raise Tax Revenue and Improve Economic Equality

Nigeria can improve economic equality by raising its tax-to-GDP ratio and bringing more businesses and workers into the formal tax system. VAT registration should cover businesses that sell goods or provide services, while tax authorities should make compliance simple for small firms. State and federal revenue agencies also need to share records so that company declarations can be checked across both levels. Companies should file company income tax regularly, while all workers, including contract staff, should be properly declared and enrolled in contributory pension schemes. Stronger enforcement against undeclared labour and tax evasion could widen the tax base. These measures may reduce the gap in VAT, company income tax and PAYE collections across states. However, differences in industrial activity, trade, agriculture, wages and living costs will still affect how much each state generates.

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