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Tax administration and the system of taxation in Nigeria was once again brought to the fore when President Muhammadu Buhari on Tuesday reiterated the federal government’s resolve to continue to sensitise and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair policy implementation and effective utilisation of resources. The Special Adviser to the President on Media and Publicity, Mr Femi Adesina, said Buhari stated this when he received the leadership of the Chartered Institute of Taxation of Nigeria (CITN) at the State House, Abuja on Tuesday. The president revealed that the National Tax Policy document had been reviewed with the aim of institutionalising a tax payment culture within the Nigerian workforce. Buhari said the progress made in diversifying the economy, providing social security and securing the country could be further improved with enhanced and expanded revenue base. “We have made some progress in the past four years. However, a lot more can still be done. A key step is to enhance and expand government’s revenue base. Today, we still rely on oil as our main source of income. This simply is not enough to meet our infrastructure, social services and security needs,” he said. While describing Nigerians as hardworking and entrepreneurial, the president said a deeper understanding of the effectiveness of tax on the economy by the populace and fair administration would help in improving government’s revenue shortfalls. In his remarks, the President of CITN, ChiefCyril Ede, congratulated the president for winning his second term in office, and assured him of the institute’s support for a successful tenure, especially in the area of using tax to improve government’s revenue. “Your victory is a clear sign of belief, trust and confidence that Nigerians have in you,” he said. Ede said some higher institutions in the country had started offering taxation as a course, hoping it will also be taught in secondary schools. According to him, nations can only achieve development with mobilization of resources through taxation. The president of CITN said: “Political leaders must set a good example for compliance on tax payment by ensuring that presentation of tax certificates remain one of the central requirements for those who want to contest elective positions.” President Buhari’s remark tends to reignite the debate on the need to review the nation’s tax policy as well as diversification of the economy, which is long overdue. This assertion is particularly relevant owing to the fact that the statement is coming on the heels of media report that the federal government is proposing to raise the Value Added Tax (VAT) from five percent to 50 percent to, among other things, enable it meet obligations to workers following the recent approval of increase in national minimum wage from N18,000 to N30,000. Although the issue of taxation in Nigeria is still a thorny one, remarkably the Federal Inland Revenue Service (FIRS) recorded an all-time high tax revenue collection of N5.23 trillion in 2018, given that it was achieved at a period when oil prices averaged $70 per barrel. VAT stood at N1.11 trillion for the first time. Prior to 2018, the highest revenue figure ever attained by FIRS was N5.07 trillion, in 2012, when oil price hovered around $100-$120 per barrel. Besides, the FIRS will be expanding its dragnet and tightening noose against tax evaders, having been given an N8 trillion target this year. The Chairman of FIRS, Dr. Babatunde Fowler, had during the 2019 Management and Stakeholders Retreat, in Lagos, recently reiterated the need for increased compliance to tax laws, adding that there would not be any serious discussion on diversification of the economy without reviewing the country’s tax regime for optimal performance. The Chairman, House of Representatives Committee on Finance, Babangida Ibrahim, while commending the FIRS on the feat achieved, pledged the lawmakers’ support for every initiative that would lead to efficient tax system in the country. “The taxation of any economy and growth of policies of government depends largely on the revenue generated by the tax authorities. We agree that to achieve effective taxation, the support of the parliament cannot be over-emphasised,” he said. At the retreat with the theme: “Parliamentary Support for Effective Taxation of the Digital Economy,” Fowler said FIRS has adopted initiatives that ensure a robust tax administration that is agile and beneficial to all stakeholders. According to him, with the deployment of various digital innovations, cost of collections in non-oil sector has improved from four per cent per N85.99 billion and N100.3 billion in 2016 and 2017 respectively, to N114.1 billion in 2018. It is our view, however, that the Nigeria tax system cannot operate effectively and efficiently except such burning issues as tax evasion and avoidance are reduced to the barest minimum while several others are also adequately addressed. While tax reforms in consonance with global best practices are inevitable, it is high time the federal government lived up to its billing to diversify the nation’s economy from its overdependence on the dwindling crude oil revenue. This will go a long way to address the contentious and contemporary issues at boosting the revenue earning capacity of government.   Source: Blueprint

Taiwo Oyedele, head of tax, PwC Nigeria, says Nigeria is one of the most difficult places to pay tax despite the government’s need for taxpayers’ money. Speaking at the recently held Tax Academy Clinic, the tax master advised the tax authorities to make technology the platform for paying taxes; not as an option. “Technology makes things faster, more efficient and more cost-effective. It’s no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never,” he said. “Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult. “So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns. In the past, getting your tax clearance certificate used to be like rocket science. “When you need it to buy a plot of land or get a contract, getting the TCC is difficult. With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems.” He said the use of technology will ensure that the cost of tax compliance is reduced, making it easy to pay taxes. “So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer. “It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost. “So you can get more people into the tax net and you can get data which is important within the economy for planning government policies that support taxpayers. At the end of the day, taxes are the way the government gets a fraction of the prosperity of people and businesses.” During the tenure of Kemi Adeosun, former minister of finance, the federal government had embarked on the Voluntary Assets and Income Declaration Scheme (VAIDS) to widen the tax base and encourage tax compliance.   Source: Thecable

President Muhammadu Buhari has said that the Federal Government will continue to sensitize and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair implementation of policies and effective utilisation of resources. Mr Femi Adesina, the Special Adviser to the President on Media and Publicity, said Buhari stated this when he received the leadership of the Chartered Institute of Taxation of Nigeria at the State House, Abuja on Tuesday. The president revealed that the National Tax Policy document had been reviewed with the aim of institutionalizing a tax payment culture within the Nigerian workforce. Buhari said the progress made in diversifying the economy, providing social security and securing the country could be further improved with enhanced and expanded revenue base. “We have made some progress in the past four years. However, a lot more can still be done. A key step is to enhance and expand Government’s revenue base. “Today, we still rely on oil as our main source of income. This simply is not enough to meet our infrastructure, social services and security needs,’’ he said. While describing Nigerians as hardworking and entrepreneurial, the President said a deeper understanding of the effectiveness of tax on the economy by the populace and fair administration would help in improving government’s revenue shortfalls.   Source: Punch

PWC Nigeria has stressed the need for tax administrators to simplify tax payment process in Nigeria, to increase compliance level. The Head of Tax, PwC Nigeria, Taiwo Oyedele, while speaking at the firm’s Tax Academy in Lagos, on Wednesday, said Nigeria’s tax revenue to GDP ratio ranked among one of the lowest in the world. Oyedele expressed worry over the enormous challenges taxpayers face in the process of paying taxes in Nigeria, underscoring the need for simpler process through the use of technology. He argued that the adoption of technology would fast-track the processes, and ultimately check tax evasion and avoidance in Nigeria.“Nigeria does not rank very well on the ease of paying taxes. So, Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax.   “It is a contradiction when you need tax money, but you make the process very difficult. If you simplify it by using technology, what that does is you are encouraging more people to pay. “There is something about compliance cost; it is something that does not benefit government and the taxpayer. It is actually the money the taxpayer pays that does not get to the government. So, both the taxpayer and the government have an objective to reduce that cost. That is something that technology does for you.” He continued: “Everything we do today is impacted by technology, which is making things better and faster and more cost-efficient and cost-effective. So, it is no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never.”   “So the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns. Even when you need your tax clearance certificate in the past, this used to be like rocket science. But with technology, one should be able to get that immediately. We know that these platforms are not perfect yet, so our role as PwC is to help many people to pay their taxes and also paying taxes ourselves,” he added.   Source: Guardian

Taxation globally is seen as a way of mobilising and supporting a nation’s financial resources. In this vein many nations have been taking the initiative to ensure that the tax administration is efficiently operated. The Nigerian tax system is beset by myriad of challenges, such as non-availability of tax statistics, inability to prioritize tax effort, poor tax administration, multiplicity of taxes to mention a few. In the quest to make tax payment stress-free and convenient, and to improve the doing-business environment in Nigeria, the tax management agency has introduced some reform initiatives to reduce the time for filing and paying taxes by 50% and to improve transparency and efficiency in tax administration. Already, the new tax reform initiatives are beginning to bring significant benefits to the government. The new tax reforms by the Federal Government has impacted tax revenue profile of the government as a record N5.3 trillion tax revenue was generated in 2018 based on data released by the Federal Inland Revenue Services (FIRS) recently. The tax reforms majorly centred on ease of filing federal taxes, tax amnesty for voluntary asset declarers (VAIDS) and getting more people into the tax net. The data released by the FIRS Chairman, Mr. Babatunde Fowler, recently showed that the N5.320 trillion collection is the highest revenue ever generated by FIRS in history. The highest in FIRS was N5.07 trillion generated in 2012. FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel. The oil price was at an average of $100 to $120 per barrel between 2010 and 2013. The non-oil component of the N5.320 trillion is N2.467 trillion (53.62 per cent), while oil element of the collection is N2.852 trillion (46.38 per cent). Mr. Fowler said: “I believe that if we continue with the same pace, we can reach 20% of the tax mix comprising of revenue from SMEs by 2019. The government fully supports us. Some projects may take a year or more to develop, but citizens’ belief in the tax system is uplifted even when they see work in progress. “Just like some of the other oil-rich countries, we never imagined that taxation would be the main way to generate revenue. Now we appreciate the fact that oil is a resource with a price determined by more developed countries, and with that, we are disadvantaged. “There is a 2026 agenda for African countries to be able to fund their budgets internally without grants or aid. It is something we can do right now. Nigeria can show the rest of the world that it can transform within a short time and fund its own budget with taxation as a primary source of revenue.” This reform initiatives, driven by the Presidential Enabling Business Environment Council (PEBEC), the Federal Inland Revenue Service (FIRS), the Kano State Inland Revenue Service (KIRS) and the Lagos State Inland Revenue Service (LIRS), include: stating the timeline to complete corporate income tax (CIT) audit on the website; registering companies on the E-filing platform and creating a simplified single schedule for each tax type on the platform, an FIRS report recently indicated. Thus with these reforms, the report said taxpayers now file and pay federal taxes online from the comfort of their offices or home; taxpayers now make electronic payment and filing of state taxes including PAYE, etc. and employers now remit statutory deductions on behalf of personnel online. In addition, corporate income tax (CIT) audits is now done within a 63-day timeline and there is access to e-platforms for all classes of tax payers. The report also indicated that the process is simple and seamless as all that the tax payer needs to do is visit the FIRS website, file all federal taxes online and to pay for Value Added Tax and Company Income Tax. Other benefits of these online tax payment platforms include; improved transparency and efficiency in tax collection and administration and improved tax revenue to even make tax payers experience better, the report said, adding that continuous improvement on the e-platform for better taxpayer experience is based on feedback received. For Lagos and Kano states, which represent the two hubs of business in the nation, tax payers can also visit the Lagos Inland Revenue Service (LIRS) and Kano Inland Revenue Service (KIRS) websites to make electronic payment of taxes including monthly PAYE. To enhance service delivery, electronic self-service help desks are available at all FIRS offices for payment of taxes. Dr. Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade and Investment said: “We are pleased with the results the reforms are achieving, and we hope that as we work to deepen these reforms they will further strengthen the system to truly drive economic growth.”   Source: Dailytrust