Nigeria's leading finance and market intelligence news report.

No multiple taxation in Nigeria but multiplicity in interface between taxable entities —LIRS

The Lagos Internal Revenue Service (LIRS) has said that there is multiplicity in the interface between taxable entities, as opposed to the perceived notion of the country having multiple taxation.

In differentiating between both, the state tax regulator said multiple taxation would happen when a tax base (or a single taxable income) was subjected to tax more than once either by the same tax authority or more than one tax authority. However, agencies of the different tiers of government often taxed a business on separate items that were in line with the laws backing them, the LIRS said.

* indicates required

“We do not have multiple taxation in Nigeria and, by extension, Lagos State. What we have is multiplicity of interface between taxable entities (business inclusive) and tax authorities,” Tola Seriki, assistant director, informal sector, LIRS, said while presenting a paper in a breakfast meeting organised by the Nigerian-American Chamber of Commerce on Thursday.

Seriki, who presented the paper on behalf of his boss and executive chairman, LIRS, Ayodele Subair, noted that local governments in the state were empowered by law to collect levies, dues and rates, stressing that those should never be misconstrued as taxes.

Companies operating in Nigeria have overtime raised the alarm over a harsh operating environment, with about 60 percent of top CEOs who were respondents in a Manufacturers Association of Nigeria (MAN) survey citing tax multiplicity as the biggest threat hurting growth of business.

This was one of the many reasons why the Federal government in February signed the Finance bill into law, to relapse some of the stringent conditions in the country’s tax system and bring more people into the tax net.

LIRS said the lack of credible data were some of the numerous challenges hurting the whole spectrum of tax administration in the country. It, however, believed that the Joint Tax Board’s Tax Identity Number (TIN) project, done in collaboration with existing biometric-based identity management database, especially the Bank Verification Number (BVN) and the National Identity Number (NIN), should substantially address this challenge.

At the state level, Seriki explained that the tax agency had so far adopted the accelerated tax audits of back years by engaging over 1,000 professional accountants and tax practitioners to collate tax audit data and assist in tax payers’ enumeration; direct bank lodgments by linking over 1200 branches of banks on-line, and also automating revenue receipt process.

Oluwatoyin Akomolafe, president of the Nigerian-American Chamber (NACC), said the LIRS had increased the state’s Internally Generated Revenue (IGR) by executing various pioneering programmes and implementing strategies, impacting positively on revenue generation and collection.

“Governments all over the world require revenue to augment the spending needs to maintain an adequate level of public investment and social services,” he said,

“Though taxation may not be the most important source of revenue to the government in terms of the magnitude of revenue derivable from taxation, it is the most important source of revenue to the government, from the point of view of certainty, and consistency of taxation,” he further said.



Comments are closed.