• Friday, March 01, 2024
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18% tax-to-GDP ratio: We won’t increase taxes, Adedeji assures companies

18% tax-to-GDP ratio: We won’t increase taxes, Adedeji assures companies

Zacch Adedeji, the acting chairman of the Federal Inland Revenue Service (FIRS), has assured corporate organisations in the country that FIRS’s resolve to increase the country’s tax-to-GDP ratio to 18 percent from 10.86 will not lead to an increase in taxes.

Adedeji said such resolve would not necessarily lead to an increase in taxes or the introduction of new taxes as the President Bola Tinubu-led administration is determined to create a wholesome environment for businesses to flourish.

The FIRS chairman had said the agency under his leadership would in the next three years achieve an eight percent raise in tax-to-GDP ratio to surpass Africa’s average of 16.5% without stifling investment or economic growth.

The plan had triggered muffled apprehensions among corporate entities that the decision could cause an increase in tax rates or the introduction of new ones.

Addressing representatives of top large tax-paying companies during a get-together at Four Points by Sheraton in Lagos on Wednesday, Adedeji said, “Our belief, understanding and vision as a revenue-generating agency is not to introduce any new tax as we only want to use data to improve compliance.”

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A statement by Dare Adekanmbi, special adviser on Media and communication to Adedeji quoted the FIRS chairman as saying that the invited companies and those willing to voluntarily carry out their tax obligations have nothing to fear.

“Our plan is simple. We want to grow tax revenue and we only want to tax prosperity and not poverty. Therefore, it is not in our interest to kill the trees that bear the fruits. My first ‘love letter’ to you is to appreciate what you have done. So, you don’t have anything to be afraid of,” the FIRS boss was quoted as saying.

“We will not collect what is not due to us. But we don’t want anyone not to pay what is due to us. Fair engagement is our plan. Rest assured that the 18% tax-to-GDP target will not translate to an increase in taxes.

“If you have been listening to Mr Taiwo Oyedele who is the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, you will have known that part of the mandate of the committee is to reduce the number of taxes.”

According to him, the purpose of the engagement with the companies is to factor their inputs into the strategic action plan being mapped out in order to address challenges hampering tax revenue collection.

Read also: Bullish 2024 budget faces execution risk on revenue forecast

Adedeji hailed the invited companies for their high sense of responsibility, urging them to continue to discharge their tax obligation diligently.

“I must also commend your commitment to upholding high tax compliance standards and responsible corporate citizenship, which sets you apart as the top taxpayers in Nigeria,” he said in the statement.

“This aligns perfectly with our vision of making taxation the pivot of national development through voluntary compliance. Your respective industries play a pivotal role in generating substantial tax revenue for the government and in shaping the economic and fiscal stability of the nation.

“We are not unmindful of the challenges facing businesses in Nigeria with the ongoing reforms to improve economic performance. These are painful but necessary choices we must make as a nation to attain our full potential.”

While responding to some of the concerns raised by representatives of the companies such as multiplicity of taxes, and duplication of tax oversight on corporate entities, the chairman promised to address the issues raised.

Some of the companies at the event included Nestlé Nigeria Plc, ExxonMobil, Shell, Guinness, Nigerian Breweries Plc, Flour Mills, Dangote Group, MTN, British American Tobacco company, First Bank, Access Bank, Guaranty Trust Bank, Zenith Bank Plc, KC Gaming Limited (Bet9ja), Airtel, Seplat, BUA Cement, Nigeria Liquified Natural Gas, NNPC Limited and others.