Digital economy to raise Nigeria’s GDP to 15 per cent by 2025

Minister of State Budget and National Planning, Prince Clem Ikanade Agba, has disclosed that taxation of the digital economy is to raise government revenue profile by about 15 per cent of the country’s Gross Domestic Product (GDP) by 2025.

According to him, the government is making concerted efforts to prioritise expenditure and place emphasis on resource mobilisation.

Agba disclosed this in his keynote address at the 2022 4th Edition of Punuka Annual Lecture, themed, “Taxation of the Digital Economy: The challenges and prospects for the Nigerian economy”.

He noted that the Federal Government has put in place the Strategic Revenue Growth Initiative (SRGI) and the Finance Act to mobilise domestic funds necessary for human capital and infrastructure development that were both drivers and enablers of sustainable economic growth and development.

His words: “The SRGI is designed to improve government revenue and entrench fiscal prudence with emphasis on achieving value for money. A total of 47 Strategic Revenue Growth Initiatives were identified across three thematic areas to achieve sustainability in revenue generation, identify new revenue streams and enhance the enforcement of existing ones as well as achieve cohesion in the revenue ecosystem.

“The digitalisation of the economy has revealed some challenges and shortcomings in the existing tax practice as it affects the allocation of taxing rights and administration of taxes, especially with respect to non-resident taxpayers.”

He added that Nigeria has sought to tackle these issues through a three-pronged approach that consists of strategic changes to tax policy, administration and the legislative framework they are hinged on.

Agba also stressed on the importance the current administration had placed on citizens’ participation in governance, tracking service delivery and development in their communities, pointing out that in order to ensure transparency and accountability in the delivery of government’s capital projects countrywide, the Budget and National Planning arm of the Ministry had been working on a web application called “Eyemark” which would assist citizens to eye mark and report on government’s projects and programmes earmarked for their communities using their mobile phones and laptops in real time.

The Eyemark App, he said, allows users to view and explore projects without registering but would require user registration to review and follow projects.

“With the full launch of the App in the coming weeks, the government requires your active participation in the process of tying budget provisions to projects and getting time value of money earmarked for capital projects, as “governance is a collective responsibility by all citizens,” he explained.

In her welcome address, the managing partner, Punuka Attorneys and Solicitors, Mrs. Elizabeth Idigbe noted that globalization has brought about digital trade which has increased growth in major sectors of the Nigerian economy such as trade, commerce and taxation.

She added that globalisation has resulted in major digital advancements with emerging issues on cryptocurrency, e-commerce and cross border digital trade.

With the constant advancements in the digital space and the given technological disruptions that are re-defining the global business landscape, Idigbe called for an urgent update in the tax regime in Nigeria so as to accommodate the modern realities of the world as it will enhance revenue generation and overall progress for the Nigerian economy.

Assistant professor of taxation and commercial law of Hamad Bin Khalifa University in Doha Qatar, Dr. Alexander Ezenagu reiterated the importance of tax when revenue is made.

Ezenagu said it is important that the government set out to tax revenue and also focus on how to task the revenue.

He also urged the government to decide on the type of reform option that would be flexible and convenient to achieve the desired goal, adding that there are many reform options to consider and that the government really needs to sit and decide to think about what reform option would be flexible, convenient but also achieve the desired goal.