Nigeria overtook India in May to become the country with the world’s highest number of people living in extreme poverty
On July 10 this year, Joanna Slater published an article in the Washington Post. In the article, she claimed that “It is a distinction that no country wants: the place with the most people living in extreme poverty.”
For decades, India remained stubbornly in the top spot, a reflection of its huge population and its enduring struggle against poverty.
Now, new estimates indicate that Nigeria has knocked India out of that position, part of a profound shift taking place in the geography of the world’s poorest people.
According to a recent report from the Brookings Institution, Nigeria overtook India in May to become the country with the world’s highest number of people living in extreme poverty, which is defined as living on less than $1.90 a day. The threshold captures those who struggle to obtain even basic necessities such as food, shelter and clothing, and takes into account differences in purchasing power between countries.
The Brookings report was based on estimates generated by the World Poverty Clock, a model created to track progress against poverty in real time. As of Monday, its figures showed that India had 70.6 million people living in extreme poverty, while Nigeria had 87 million.
What’s more, the gap is widening: The number of people living in extreme poverty in India is falling while the opposite is true in Nigeria, where the population is growing faster than its economy. Extreme poverty rises in Nigeria by six people each minute, according to calculations by the World Poverty Clock. Meanwhile, the number of extreme poor in India drops by 44 people a minute.
“It’s a good news story for India, coupled with some caveats, and it’s a real wake-up call for the African continent,” said Homi Kharas, director of the global economy and development program at the Brookings Institution. Extreme poverty is increasingly an African phenomenon, the Brookings report noted. Africans make up about two-thirds of the world’s extreme poor, it said.
By 2030, that figure could rise to nine-tenths if current trends continue”.
Going through the reports of Johanna Slater, one could see that Nigeria of all nations should be the least country to be over burdened by the current multiple taxations it now experiences in the hands of the federal, state and local governments.
All three tiers of government have, for years now been levying numerous taxes and levies in their effort to generate more revenue. State and Local Governments have been known to employ consultants and task forces to assess and collect taxes, which were hitherto unknown sometimes at gun-point. As at the last count and according to figures compiled by the organized private sector, there were about 250 of these taxes and levies. Persistent pressure on the Federal Government by the OPS led to the promulgation of a Decree that harmonized such taxes and levies in an effort to address the problems once and for all. Reports, however, indicate that the problem still persist in many States and Local Government.
The implications of these taxes and levies constitute a disincentive to both domestic and foreign investment. There are known incidents where big multinational companies have been sealed by Armed Task Forces for about a week or more on the grounds of non-payment of some un-authenticated taxes and levies, they hinder intra-states and intra-local governments’ trade and normal movements. A situation where numerous check-points exist within one city or local government area is very oppressive, continuous harassment of most small businesses by such levies as sign board fees, pollution fees, land fill fees, etc. are a threat and hindrance for their progress or even existence and lastly, these taxes and levies constitute a serious threat to the morality of the people who are forced to devise dishonest means to these dubious taxes and levies.
Multiple taxation by different agencies of Federal, State and Local Government is one of the factors militating against the performance of business enterprises in Nigeria. Micro- and small- and Medium-enterprises (SMEs) as grass root enterprises have particularly fallen of layers of taxation by the Government agencies. Any sustainable attempt to create the enabling environment for the development of SMEs as poverty alleviation institutions would have to tackle the problem of multiple taxation.
I remember Alhaji Ahmed Joda’s committees recommended to the central government in 2000 that the government should embark upon a public enlightenment, campaign on the rights and abuses of multiple taxation by Government agents. One of the aims of the reform on tax administration was to diversify the revenue base from petroleum related taxes, treat taxpayers in a fair and responsible manner, promote investment in a diversified economic base in order to promote further economic growth, simplify procedures and policies so that compliance is enhanced, reorganize the tax administration to increase effective compliances, reduce the compliance cost to taxpayers and make it more supportive of taxpayer services, promote integrity by both tax administrators and taxpayers and provide reasonable allocation of responsibilities for fiscal matters between the partners in the federal system.
When the reform on tax was launched in 2000, the main Objective of the program was to “operate a transparent and efficient tax system that optimizes tax revenue collection and voluntary compliance”.
Other objectives of the reform program include: a shift in relative emphasis from income to consumption taxes i.e. indirect tax, a revised comprehensive personal income tax regime, modernized accounting and derivation for taxable profit for companies income tax, restricting the number of tax instruments available to sub-national governments, as well as how these taxes are administered while ensuring that such governments have access to reasonable own source revenue, modernizing the FIRS and/or the Joint Tax Board so that it is equipped to administer the reforms in an effective manner and obtain financial and administrative autonomy for the FIRS to make it more effective and efficient.
Added to his responsibility as a tax collector, Dr. Fowler should address the issues raised in the reforms on tax collection.