• Tuesday, February 27, 2024
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At BusinessDay forum, stakeholders propose strategies to rev up tax revenue

tax

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