Nigerians have been encouraged to understand that taxes are crucial for funding essential public services and infrastructure.
In a call for greater tax compliance, tax analyst Arabinrin Aderonke Atoyebi emphasized that paying taxes is not just a legal obligation but also a key driver of financial security, business growth, and national development. In an opinion piece titled “The Benefits of Tax Compliance in Nigeria,” Atoyebi expressed concern that many Nigerians view tax payment as a burden rather than a necessary responsibility.
She pointed out that non-compliance often results in penalties, financial restrictions, and limited access to government services. “I have seen it happen repeatedly. Someone needs a loan, a contract, or even a government service, only to find that their tax records—or lack thereof—are standing in the way,” she wrote.
Atoyebi further emphasized the negative consequences of failing to comply, noting that tax defaulters not only face hefty fines and interest but also encounter financial obstacles that could have been easily avoided. She stressed that avoiding taxes does not save money in the long run, as penalties eventually surpass the initial tax liability.
In addition to the financial repercussions, Atoyebi highlighted that tax clearance certificates are vital for accessing government benefits like free education, healthcare, and housing schemes, especially in states like Lagos. Businesses also require tax clearance to qualify for government contracts.
“Those who neglect their tax obligations often find themselves unable to access these services simply because they failed to comply,” she stated.
Atoyebi also noted the financial incentives available for tax-compliant individuals and businesses. Small businesses that file their returns correctly can qualify for exemptions, while larger corporations that pay their taxes early can receive tax credits ranging from 1% to 2%, thereby reducing their overall tax burden.
Moreover, she pointed out that tax compliance enhances financial planning and boosts creditworthiness. Lending institutions often review tax returns when assessing loan applications, and a clean tax record improves the chances of approval while securing lower interest rates.
“Tax-compliant businesses have an edge because they are viewed as reliable, while those that evade taxes risk damaging their reputation and losing business opportunities,” she observed.
Reinforcing the civic duty of paying taxes, Atoyebi urged Nigerians to recognize that taxes are what fund crucial public services and infrastructure. She cited developed nations like the United States, where citizens understand the role of taxation in national progress.
“If we want a better Nigeria, tax compliance is not an option. It is a necessity,” she asserted.
Atoyebi concluded by urging Nigerians to adopt a culture of compliance, emphasizing that the benefits far outweigh the costs. “Do the right thing. Pay your tax today,” she advised.
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.
