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Promoting Good Governance.

$15 billion tax evaded by companies can build new classrooms in over 70,000 public schools, equip 30,000 PHCs

THE Chairman of the Federal Inland Revenue Service, FIRS, Babatunde Fowler had said on Wednesday, October 23 at the West Africa Tax Administration Forum in Abuja that the country loses about $15 billion, an equivalent of about N4.57 trillion at N305 to $1, annually to tax evasion.

A query by The ICIR has shown that this amount of money can help construct two blocks of three classrooms in over 70,000 primary and secondary schools in Nigeria, renovate and equip 30,000 primary health centres and still get the 21 federal teaching hospitals a radiotherapy machine each.

Fowler made the disclosure at the forum organised to chart ways of combatting offshore tax evasion through the exchange of information regime. He said a huge amount of money is being kept offshore and is un-taxed.

Fowler noted that the challenges offered a global response to the issues of international tax avoidance, tax evasion, illicit financial flows, money laundering and other harmful tax practices based on cooperation and the use of advanced technologies to tackle the issues.

He said when the technology is out in plain terms, revenue available from it will be  spent on public service and investments in human capital.

What N4.57 trillion can get Nigeria

The N4.57 trillion worth of evaded tax has a huge potential of projecting socio-economic prospects for the country, thereby improving the human capital index of the country.

Going by the 2020 proposed budget estimates, for instance, the Universal Basic Education Commission (UBEC) budgeted the sum of N50 million for the construction of two blocks of three classrooms in Jos, Plateau North Senatorial District.

A Basic Education Profile of National & Regional Statistics from the UBEC reveals that there are 73,179 number of schools: primary (61,305) and junior secondary(11,874) in Nigeria. Enrolment data also from the UBEC states that there about 24 million students at the primary level and 4.2 million at the junior secondary level.

With the spate of dilapidated and uncompleted classrooms in public schools littered across the country, the government can spend N3.6 trillion to build two blocks of three classrooms each at the rate of N50 million each fo the entire 73,179 public schools in the country.

Another important determinant of human capital development is the health of a nation. The ICIR in 2017 under its Open Contracting Reporting (OCR) project carried out a nationwide investigation that exposed the rotten state of primary healthcare centres (PHCs) across the country. Over the years, billions of naira have been committed to construction and equipping PHCs and ensuring universal health coverage for the country. PHCs are the closest to people at the grassroots.

In the proposed 2020 budget details, the National Primary Health Care Development Agency (NPHCDA) allocated between N9 million and N16 million for the renovation and equipping of a PHC.

The ICIR could not get the number of PHCs in the country from the website of the NPHCDA, the government agency charged with the responsibility of making PHC services available to all in Nigeria. However, an article published by the United States National Center for Biotechnology Information (NCBI) pegged the number of PHCs in Nigeria at 30,000. This would mean that N480 billion will renovate and equip all PHCs across the country at N16 million each.

Still on health, an undercover investigation by The ICIR in 2018 revealed the true quality of healthcare available to cancer patients resulting from insufficient radiotherapy machines in most federal teaching hospitals across the country have impeded the treatment of numerous cancer patients, leaving many of patients stranded.

The investigation revealed that there are only four radiotherapy machines available all over Nigeria and that only the one at National Hospital Abuja is functional for cancer treatment; the rest are only useful to prolong a patient’s life. The story also reveals that the most expensive linear radiotherapy machines cost between $750,000 and $1.5million (between N228 million and N457million at the official rate of N305 to $1). This excludes associated costs such as the vault that will house the system, treatment planning, and oncology information system software, lasers, and other accessories.

With the 21 number of federal teaching hospitals in the country, at the rate of N457 million for one radiotherapy machine, this will cost the country about N9.6 billion to acquire the machine for each teaching hospital.

In summation, if the government is to take on these expenditures, it would have spent N4.15 trillion, about N421 billion less than the actual worth of evaded tax.  N421 billion is more than 45 percent of the $3 billion (N915 billion) loan approved by the World Bank for the expansion of the power transmission and distribution networks in the power sector.

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