Change and dynamism seem to be constant and most underlining factors in tax administration all over the world. Tax experts thus seem prepared for this dynamism in the face of the global recession recorded in most economies of the world.
This is what the Chartered Institute of Taxation of Nigeria (CITN) calls the new normal, inferring that new situation has emerged in the tax environment that now looks normal. This change requires the Council to quickly re-strategise to manage the situation through effective teaching and retraining of both old and incoming members in the coming months and years.
To play this role effectively, the Council moved into Port Harcourt, Rivers State, where it held its first-ever council meeting outside Lagos; with a retreat to go with it.
The CITN is at the moment led by Gladys Olajumoke Simplice who is the President as well as Chairman of Council. The institute chose the Faarah Coffee Lounge (which actually is not just about coffee), a highly fortified and exquisitely maintained facility in the heart of the Garden City as venue of the well-attended retreat and meeting. The event took four days of intensive brainstorming, teaching and learning. The Council members said they were in Port Harcourt to also perfect some listed proposals and suggestions to the Federal Government in view of the impact of the Covid-19 pandemic on the economy.
The President particularly called for a national tax palliative, reiterating the call for the FG to forgo payment of income tax in 2020. She told newsmen that such palliative would boost purchasing power of workers and help rescue producers in the coming months as recession would sets in.
The President said: “If income tax payers get waiver this year, they will resume paying next year. That way, they boost the economy by having expendable income”.
As professionals who look at books of companies, the institute says most Nigerian companies cannot afford even to pay for tax advice. Olajumoke said many countries are so far giving different palliatives, adding that the taxpayer needs to first survive so as to resume payment of taxes.
Rivers State as tax model
It was in this light that Simplice commended the Rivers State government led by Gov Nyesom Wike for the recent rollout of huge palliatives to taxpayers in the state.
The tax palliatives were unveiled few weeks ago. The state government said the measure was to cushion the effects of hardship occasioned by COVID-19 pandemic lockdown.
Governor Wike had announced the suspension of all informal sector tax drive for the year 2020, noting that the informal sector was the worst hit in terms of the economic impact of the COVID-19 pandemic.
He further suspended all local government taxes and levies for the 2020 tax year, except tenement rate. He granted a waiver of 50 per cent on all assessed Capital Gains Tax (CGT) until December 2020.
These measures were released by the executive chairman of the Rivers State Internal Revenue Service (RIRS), Adoage Norteh, who announced government’s extension of the submission deadline of self-assessment and annual returns by individuals and companies operating in Rivers to December 31, 2020 due to COVID-19 restriction of movements which affected businesses.
Government had stated: “Most of these MSMES operate in the rural areas, with many having limited online connectivity to be able to file and pay their taxes electronically.”
The policy also granted a 20 per cent discount on all Personal Income Tax (PIT) assessment issued to owners of schools, hotels, pharmacies and hospitals, as well as other allied businesses in the year to December 31, 2020. Business leaders in the state swiftly welcomed the tax palliative which was released on Wednesday, July 29, 2020. The chairman, Manufacturers Association of Nigeria (MAN), Rivers/bayelsa chapter, Adawari Michael Pepple, who spoke for businesses told Businessday that this would shut out the various touts and task forces destroying traders’ goods everywhere in Port Harcourt.
While in Rivers State, Simplice referred to the Rivers model and pointed at what she called evidence of tax utilization whereby tax revenue is deployed in such a way that taxpayers would see clear evidence of their sweat.
Illustrating her point with huge enthusiasm, the President called on other states to emulate the Rivers State government in both tax utilization evidences and tax palliatives regime application.
The appeal came at a time sections of taxpayers in some states including Lagos have cried out over what they called excessive squeezing by tax touts and local council agents unlike in Rivers State where such taxes have been suspended.
Some of the firms in Lagos were quoted in a recent newspaper report to say they are forced to pay many unlikely taxes including ‘Zamfara State Vehicle Paper’, ‘Ogun tax paper’, ‘Zamfara State Carriage Paper’, etc. The firms complained that these taxes and collection methods at such a period were snuffing life out of the firms.
New normal and new teaching:
Speaker after speaker at the Garden City retreat harped on the need to learn new things to contend with the emerging new dynamics in the tax environment, known as the new normal. The teaching was mainly handled by Michael Stevens Consulting who treated the theme: ‘CITN and the March Towards Strategic Redirection as a Recipe for Global Leadership in Professional Practice’.
Reviewing the training, a Council member, Justina Okoro, said the retreat looked at the journey so far as an institute and what they needed to do next to impact positively on Nigeria and the economy. “This retreat is to look at strategies and understand ways to achieve more with less effort. It is a focused cause of action in certain areas of policy. “Our leaders need to be focused in their plans of action. You need to decide what you want to achieve at the of a set period. Corporate organizations must not be distracted in what they set out to achieve. So, you must have a vision, a mission, and strategy to achieve them.
“CITN wants to be the foremost tax institute in Africa and the world, and so how to achieve this, say in 2030. Nigeria set certain targets for 2020; so did we achieve them, and if not, is it late? The nation can always try again. It is to re-plan and refocus on how to achieve whatever that was intended.”
Some council members who also spoke said the retreat was important so as to fashion out ways and strategies to assist each council member to be prepared to help the general membership. They said these would help reposition the CITN in the quest to be reckoned as a global power in tax administration. They said the institute is now working to bring up practitioners committed to professionalism.
President speaks
Giving a background of the institute, Simplice stated: “The CITN was signed into law by then military president, Ibrahim Badamasi Babangida, in 1992. The Act gave us power to decide membership, determine what a professional will bring in, and train the practitioners.
“Taxation is a living subject and we need to track this. Things change. Over the years, the CITN has been part of all the changes and the amendments of the tax law in Nigeria because we travel all over the world and bring home the experience to improve our tax laws. We have the European Union fiscal policies, GITAP, South Africa Institute of Taxation and the UK version of it. They inform us of things happening in other places.
“If we need to train our people in any area of the tax practice, we have enough materials and intellectual resources to do that. We train others too. We train people who want to specialize in certain aspects of taxation. We have our tax academy.
“We look at the tax Acts and how they affect life and people; are they right, or due for amendment? We recommended 90 per cent of the Finance Act of 2019. We do not only look at the government aspect but impact on the people. As we speak, we are looking at the Finance Act of 2019, and we are saying, there are certain things that can be amended because of Covid-19.
“This retreat is to first look at the journey so far as an institute and what we have done that has impacted positively on Nigeria and the economy. We want to know what we can do better and what we can tell the FG to do for the people of Nigeria. We already have the template and we will take the resolutions to the FG.”
No cause for alarm:
Some council members appealed to Nigerians not to be apprehensive in new tax laws and amendments that appeared to affect religious houses, saying the law only wants to tax the business activities of churches and mosques like any other business.
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