FG, states asked to be thorough in implementing tax reforms

The federal and state governments have been urged to be thorough in the implementation of the reforms to their tax administration systems.

This is against the backdrop of the paucity of funds in the face of new economic realities driven by the reduction in crude oil revenues and the awareness that even governments’ aspirations cannot be realised by over-dependence on federal allocations.

The advice was given in Lagos at the launch of KPMG CFO Survey by Segun Sowande, partner, Management Consulting; Tola Adeyemi, partner & head, audit services, KPMG Nigeria; Sunday Ogungbesan, coordinating director, standards and compliance group, Federal Inland Revenue Service; Onene Osila Obele-Oshoko, executive chairman, Rivers State Internal Revenue Service, and William Babatunde Fowler, executive chairman, Lagos State Internal Revenue Service.

Meanwhile, Lagos and Rivers states have said that through serious commitments in their resolve to generate enough money to carry out the duties of governance, they have been able to plug avenues of tax leakages as well as employ modern technology for effective operations.

Segun Sowande said the purpose of the survey was to stimulate action and to point way to things CFOs should be doing differently to ensure effectiveness in tax administration in their various organisations.

“The CFOs must develop a clear vision of the finance functions that your organisation will need to do and what you need to do to attain it; make sure you achieve flawless execution of transactional services to free you up for more strategic roles. This has to do with book keeping aspect of it; Evaluate your use of outsourcing and shared services as a means of reducing cost and improving efficiency; take control of your talent agenda; attract and retain the right talent; reevaluate your existing technology and harness business intelligence tools to provide more meaningful insights, and proactively engage with regulators,” he said.

Addressing the theme, ‘Next Frontier in Tax Administration’, Onene Obele-Oshoko said for Rivers State “compliance is key”. According to her, the state constantly aims to be the significant driver of internally-generated revenue and a credible tax administration.

Obele-Oshoko said the state had put together a number of things to drive compliance and efficiency, among which are “stakeholders’ engagement, elimination of unprofessional conducts, engendering confidence in the service, manpower development, IT infrastructure, improved processes, clear operational procedures and adherence to provisions of the law.”

In his presentation, William Babatunde Fowler, the Lagos State Internal Revenue Service executive chairman, explained that taxation was an efficient tool to cushion the effects of new economic realities in Nigeria. He disclosed that there had been a steady growth of tax payers in Lagos State varying from 10 percent in 2005 to 21 percent in 2013.

According to him, Lagos has been able to record huge success in its tax administration through advocacy, education and constant enlightenment of the populace.

“We have constant discussions with tax payers, sensitising them on the import of tax payment. What can the state provide for you without internally generated revenue? Oil will not continue to drive Nigeria’s revenue, we must look inwards,” he said.

Reeling out figures, Fowler said that the state’s IGR increased from N18 billion in 1999 to about N237 billion in 2013 due to the adoption of new revenue generating strategies.

“In 1999, Lagos State government generated about N18 billion as its IGR. But in 2013, the IGR increased to about N237 billion. This is an increase of about N219 billion within 14 years. There had been steady growth in tax payment in the state,” he said.

“Lagos State has witnessed phenomenal infrastructural and social development in the past years, most of which were and are still being financed with taxes. In light of this, the Lagos State board of Internal Revenue Service will do all such things deemed necessary and expedient for assessment and collection of tax and shall account for all taxes collected,” he said.