At a forum organised yesterday by BusinessDay in partnership
with the Federal Inland Revenue Service (FIRS) and
PricewaterhouseCoopers (PwC), stakeholders suggested strategies that
could help government rev up income through taxes, especially in the
face of the present lean oil revenue.
Samuel Ogungbesan, immediate past acting FIRS chairman, suggested
that the first step would be to populate a central tax database that
would provide adequate information on those eligible to pay taxes, as
obtainable in France with over 32 million tax payers and South Africa.
He said there was need to further push for an efficient tax revenue
collection process, but that this would only happen if the entire tax
system was computerised in order to check the present trend of running
after taxpayers.
There is also the need for other stakeholders to challenge the tax
system, he said, as he bemoaned the discord between policy makers and
regulators, and kicked against the resolution of the National Assembly
on the enactment of the FCT Board of Internal Revenue despite informed
counsel by the office of the erstwhile minister of finance, Ngozi
Okonjo-Iweala.
The event focused on the theme, “Beyond Oil, Tax as Alternative
Source of Revenue,” and specifically aimed at mobilising stakeholders’
support for a better tax system in Nigeria.
Speaking at the workshop, Ogungbesan argued that most companies
thrived on the lingering face-off between federal and state regulatory
agencies to evade taxes.
According to him, the revenue accrued from personal income tax per
month presently stands at N70 billion against N8.7 billion as of
inception, while abysmal N2.6 billion is realised from sales tax per
annum.
The government, however, has made efforts at improving the systems,
he said, explaining that with current synergy and support from NEITI and
relevant stakeholders in developing common tax template, “there’s no
hiding place for tax evaders” across the country.
Ogungbesan noted that the Service was already reviewing the currently
VAT law with the bid to bring it in tandem with current realities
obtainable across ECOWAS sub-region.
While advocating tax relief for the less privileged Nigerians who are
presently facing hard times in the face of the economic downturn,
Ogungbesan noted that various attempts to shore-up revenue and fund
deficits through surcharges and other platforms to finance deficits were
inefficient and inadequate.
In his presentation, Taiwo Oyedele, partner and head of tax and
pegulatory services, PwC, stressed the need for synergy between various
regulatory agencies at federal, state and local government levels in the
tax administration, as well as banking sector.
According to him, an average Nigeria’s personal income tax revenue as
at 2013 stands at $7.5 billion and $220 per capital income as against
South-Africa’s $75 billion and $1,500 per capital income, stressing that
“an average South African is seven times richer than an average
Nigerian.”
Oyedele noted that Nigeria’s VAT revenue is second lowest in the
African continent, emphasised the need to ensure compliance at all
levels in tax administration.
He specifically bemoaned a situation where over 127 different taxes
both statutory and self-generated taxes and levies on manufacturers in a
particular state in Nigeria.
In the bid to resolve the bureaucratic bottlenecks in tax
administration, Oyedele noted that PWC facilitated stakeholders meeting
with the view to identify and streamline various taxes.
Some other challenges identified in achieving the onerous task of
effective tax administration, include: fiscal federation and overlap in
taxing powers; non-implementation of national tax policy, unclear fiscal
policy direction, poor tax knowledge by policy makers (including
National Assembly) an the public; ambiguous and dated tax laws,
earmarked taxes and slow tax resolution.
To shore up revenues from nation’s VAT in line with international
best practices, Oyedele proposed that taxes on luxury products including
cars can be raised by 15 percent, while certain essential sectors that
touch directly on the lives of most Nigerians including educational and
health sectors should be zeroed.
Oyedele advocated voluntary tax compliance by citizens, quoting
Franlkin Roosevelt, Former American President, that “Taxes are after
all, the dues we pay for for privileges of membership in an organised
society.”
Frank Aigbogun, Publisher, BusinessDay newspaper said the roundtable
was part of an overall strategy of stakeholders engagement to improve
tax compliance structure in order to achieve the primary objective of
increasing revenue collection for the government.
Represented by Phillip Isakpa, Editor, BusinessDay, Aigbogun said
BusinessDay was committed to contribute its quota in efforts at widening
the country’s revenue sources, and assured that the paper would
continue advocacy and conversations with relevant stakeholders on
improving the tax system.
Opeyemi Agbaje, CEO, Advisory Services, who chaired the panel
session, identified the problems of Nigeria’s tax system to basically
include, inefficiency, and the present low oil prices, which have also
slowed growth and affected collectible tax revenues.
He suggested that increasing the nation’s tax base and diversifying
revenue base would entail the government proving itself to be
accountable and checking corruption.
On the other side, Agbaje advised citizens to understand that they
must comply with tax payment, which would then give them the voice to
demand good governance.
He also advised the FIRS to pursue a vigorous advocacy on tax process
and observed the need to empower the tax agencies to deliver on
mandates.
Onyinye Nwachukwu & Keinde Akintola
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