Nigerian companies over the years have fallen prey of the whips of tax authorities due to defaults in tax payment, remittances falling short of tax authorities’ expectations etc. Tax experts have noted that tax payment and compliance despite mandatory according to the law is a complex system which has seen companies’ fault in their tax strategies and inefficient in undertaking their tax functions.
To this end, KMPG Nigeria at a press conference on Thursday announced the launch of “Tax Reimagined” in Nigeria which is a new way for corporates to design and implement a strategy to manage their tax affairs in the ever-changing landscape in the world of taxation.
The solution was said to have been launched in South Africa and earlier this month, in Nairobi, Kenya.
Dermot Gaffney, Africa head of tax reimagined said, “This is a service where KPMG facilitates the in-house tax functions of our corporate clients to reinvent their tax function, so they can focus on their key issues and risks to ensure their tax strategy is aligned with the overall business and finance strategy.
Read also: KPMG partners quit in wake of Whatsapp row
“it is important that tax function is clearly able to articulate its mandate to the wider organisation and demonstrate the value they bring to the business,” he said.
According to him, it is easy to measure tax in financial numbers but they don’t tell the entire story and value proper management of tax within and organisation brings to that organisation, hence the holistic solution would help the tax function within any corporate entity to tell the story of tax. “if you get your tax wrong, authorities can easily close down your business, so you have to pay attention to the management of your tax function,” he said.
Meanwhile in a fast changing and technology driven world, it is expedient that companies keep abreast and remain savvy in disruptions around the world especially in the area of taxation.
“There are many global trends and disruptors that are placing increasing pressure on large organisations and the number of new technologies available to the tax function can be confusing,” Ralf Bauer, KPMG Germany and EMA region Tax Reimagined solution architect explained further.
With global tax reforms, tax authorities responding to increase their share in the revenue. This finally comes down to the tax department of companies as they need to supply accurate data and information in real time. “It is critical that the head of tax in any large group understands the range of solutions and sourcing options in the market and is able to identify which may be the best suited to his organisation’s need,” he said.
From the Nigeria angle, there has been a lot of aggressiveness towards tax revenue, also evident in the recently presented 2020 budget as this threatens further companies that are inefficient in their tax functions.
“As we see the Nigerian economy is going and the gaps between government revenue and expenditure, tax as become more important as a source of bridging that gap, going forward, there will be more of it” Nike James, tax partner, KPMG Nigeria emphasised.
“With Tax Reimagined, you are more assured that you are running your business in a very efficient manner, numbers generated for your tax liabilities are more accurate and ultimately your cost of compliance as an administration declines,” she explained.
This initiative should see a ripple effect in improving government revenue and reduce penalties and cost imposed by tax authorities on inefficient companies in the area of tax.
Wole Obayomi, partner & head, tax, regulatory and people service said, “Corporates are facing many common issues in today’s fast changing world but the solutions needed to help them comply with their tax obligations in the different markets they operate in are unique to each client.
“KPMG’S Tax Reimagined is a technology driven solution that is customised to each client’s particular circumstances and need.”
While this solution would largely be beneficial to larger companies due to their complexity in operations, KPMG explained going forward it may look into creating a lighter version for small and medium scale companies in driving efficiency in tax functions.
