CITN president explains cause of tax evasion by Nigerians
The President, Chattered Institute of Taxation of Nigeria (CITN), Dr. Mrs. Olateju Somorin has identified Nigerians’ inability to see taxpayers’ money at work as one of the reasons they evade tax.
Speaking at the Business Club, Ikeja Luncheon in Lagos recently, she noted that according to a survey carried out by PwC to find out why many Nigerians do not pay tax, results indicate that 70% of participants cannot see taxpayers’ money at work, 22.5% said it was due to the tax rules being unclear and compliance process being too complex while 7.5% said it was due to poor enforcement by tax authorities.
Speaking further, she stated, “Nigerians provide for themselves, the basic public goods which ought to be provided by the government with taxpayers’ money. Many Nigerians would ask, why pay to a common purse when individuals and enterprises still play the roles of government – generating their own power, drilling personal boreholes, paying outrageous school fees to send their children to school privately and making contributions to fix roads? Many see the government and especially the tax collecting bodies as enemies and cruel. This, to a large extent, has increased the incidence of tax evasion and avoidance. The Tax Authorities therefore, may not be able to generate optimum revenue where taxpayers are yet to see any physical proof that their tax money is being judiciously used.”
Analyzing the 2017 budget, she stated that ‘The budget does not provide for changes in VAT rate in 2017 adding that Nigeria needs a more comprehensive VAT reform comparable to what obtains in other countries where a higher VAT rate is matched with input VAT recovery and lower income tax rate.
This is consistent with the shift from direct to indirect taxes enshrined in the National Tax Policy. Compliance efforts of FIRS will likely increase the revenue yield from the VAT.The National and State Houses of Assembly are encouraged to establish a Taxation Committee to focus on tax matters and collaborate with the Tax Policy Implementation Committee.
Similarly, Dr. Omode Idris, President Association of Professional Bodies of Nigeria, who spoke on the 2017 budget, noted that the presentation of the budget to the national assembly and subsequent debate, discussions at committee and public hearing level for the first time is a welcome development. This will sanitize budget and budgeting process for a broader, more acceptable and implementable budget.
“The involvement of civil organizations, individual professional associations and many other groups at national assembly level should be sustained. It is fervently expected that germane contributions to the budget will be addressed before the national assembly pass the budget for presidential assent,” he said.
In an interview with the President Business Club Ikeja, Dr. Rotimi Oladele stated that ‘the budget is what every Nigerian must be concerned with. Many people are not concerned about the budget but they complain about the effect of the budget.
He said: Nigerians should know about the content of the budget and identify the areas of concern. Many businesses are dead before they are set up because of the content of the budget. The budget is the major illumination platform that guides businesses. There is no budget that is perfect and that is why it can be adjusted or re aligned.
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