Regulation of Tax Agents Essential to Curb Abuse—Presidential Committee Chair
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has revealed that Nigeria collects only 30% of its potential tax revenue—leaving a massive 70% shortfall, among the highest globally. Speaking on the theme “Taxation for Development: Policies, Law and Implementation” at the 27th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja, Oyedele highlighted deep-seated inefficiencies in the country’s tax system. He pointed to policy loopholes, rampant abuse of waivers and incentives, and weak enforcement as primary contributors to the revenue gap. He emphasized that significant losses stem from the misuse of import waivers and duties, arguing that no taxpayer should receive deductions or allowances on imported goods without first paying the associated duties. To tackle these challenges, Oyedele advocated for the deployment of advanced tax technologies capable of real-time monitoring. He noted that intelligent systems can track inventory, monitor sales, detect inconsistencies, and uncover evasion—particularly when there’s a mismatch between reported income and lavish lifestyles, such as frequent international travel or luxury spending. He expressed concern that while a few exploit the system for personal gain, millions of Nigerians bear an unfair tax burden. He disclosed that some of the country’s largest companies—especially in the oil and gas sector—face paper tax rates as high as 85%, yet many have paid little or nothing over the past decade due to aggressive tax planning and unchecked incentives. Oyedele questioned the ethics of making billions while contributing nothing to the public purse, insisting that all entities must shoulder their fair share of the tax responsibility. He also criticized the role some tax professionals play in enabling evasion. According to him, certain agents lack the necessary technical knowledge and ethical standards, with some even selling confidential tax strategies to the highest bidder—a practice he warned could destabilize Nigeria’s fiscal health. To address this, Oyedele proposed a comprehensive regulatory framework for tax practitioners. This would require all tax agents to be accredited, demonstrate competence and ethical integrity, and register officially. Agents would need to prove personal tax compliance and ensure a verifiable connection between themselves and every filing they handle. He stressed that practitioners who mislead clients—for example, by falsely claiming that VAT and withholding tax offset each other—would face sanctions such as suspension or disqualification. Oyedele further recommended that every business, regardless of size, should appoint a designated tax representative. Drawing from international best practices in the U.S., Australia, Malaysia, and South Africa, he noted that these countries not only regulate individual practitioners but also oversee the professional bodies that certify them. Although he acknowledged that reform efforts may face pushback, he asserted that Nigeria’s fiscal survival hinges on eliminating leakages and ensuring transparency across the board. Supporting Oyedele’s call, Abimbola Oyelola, Chief Economist and Group Head of Research at the Bank of Industry (BoI), urged stakeholders to move beyond skepticism and actively engage in the reform process. Representing BoI’s Managing Director, Olusupo Olusi, Oyelola emphasized that reform success depends on collective participation and an informed public. “The best way to predict the future is to operate it—not just complain about it,” he stated. Oyelola reiterated BoI’s commitment to Nigeria’s industrial transformation through financial and advisory support for businesses. This, he explained, will help build enterprise capacity and drive sustainable national development. Oyedele also sought to dispel common misconceptions around Nigeria’s Value Added Tax (VAT), currently at 7.5%. Many small business owners, he said, wrongly assume they must pay VAT out of pocket, when in fact, the tax is borne by the end consumer. He noted that enrolling in the VAT system could offer financial benefits for SMEs and professionals through input tax credits. Despite criticisms, he pointed out that most consumer goods are either VAT-exempt or zero-rated, easing the burden on low-income households. While acknowledging that Nigeria may eventually need to raise the VAT rate—possibly to 15%—he stressed that any such move must be paired with measures to protect vulnerable groups. For now, the government has opted to keep the rate at 7.5%. On broader reforms, Oyedele emphasized the urgent need to boost personal income tax compliance. Efforts are ongoing in collaboration with the Joint Tax Board and state tax authorities to simplify the system and improve transparency. He lamented that many tax officers operate without adequate data on taxpayer behavior, making the system reactive rather than proactive. For long-term improvement, he argued that trust—not fear—must drive compliance, with tax payment viewed as a civic duty, not a penalty. He also flagged the need for Nigeria’s VAT system to remain regionally competitive, warning that significant rate disparities across West Africa could fuel transshipment and abuse. Looking ahead, Oyelola shared the BoI’s efforts to support innovation and entrepreneurship, particularly through tech hubs and digital platforms. Young Nigerians, he said, are already proposing creative solutions to decentralize development. BoI currently operates five tech hubs in two major cities, with plans to expand nationwide in the coming year. In conclusion, he called on all Nigerians—citizens, business leaders, and professionals—to take ownership of the tax reform process. “Paying tax should not be a source of fear, but a badge of trust,” he said. “It’s no longer enough to critique; we must participate.” For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.
Regulation of Tax Agents Essential to Curb Abuse—Presidential Committee Chair Read More »
