Experts advocate better working milieu to drive FDIs
The experts, who noted that tax remains an economic growth driver, one of which is the Foreign Direct Investments (FDIs), also sought a better working environment to drive these FDIs.
The Managing Consultant, Pedabo Associate Limited, Albert Folorunsho, said multilateral agencies and the government needed to realise that taxation could not be relegated to the backwaters of political discourse.
On the global taxation, Folorunsho stressed that there was an action plan through the Organisation for Economic Cooperation and Development (OECD) to curtail excessive tax and profit shifting from developing countries to low tax territories, so that countries, where real activities are taking place, enjoy tax revenue.
He said this during the investiture of Dr. Titilayo Fowokan, as the third State Chairperson of the Society of Women in Taxation (SWIT), Lagos Chapter.
He said: “Nigeria is a member and has signed up to the double taxation agreement. Tax is not the only FDI driver. Hence, full compliance would not discourage FDIs in the country. If you look at the economy and most companies operating they are majorly owned by foreign companies and we must give them the enabling environment to operate.”
To further drive FDI, Folorunsho noted that infrastructure and the enabling environment must be in place.
“Nigeria’s tax rate is low compared to other countries. So, it is a veritable environment for investment. There is no limit to foreign investment if the atmosphere is right. We also need to change the narrative of the Nigerian economy regarding security, government stability, and availability of funds,” he said.
On taxing the digital revenue, the Folorunsho said: “Most of those activities from Google and others are also consumed in Nigeria, though they are being imported. You don’t see them having a permanent establishment in Nigeria but they are generating activity.
“So, what’s been done now is to ensure that the tax due for Nigeria is deducted. Whether you come into Nigeria or not, if an activity is consumed in Nigeria, the Value Added Tax (VAT) must be paid in Nigeria. Those are the leakages we are having now that should be curbed,” he said.
Fowokan, on her part, said there is no hiding place for any organisation as the global tax scheme has come to stay.
She added that Nigeria was preparing to get her fair share from the FDI, while the crux would be to attract foreign investment to boost the economy.
“With the global tax drive, your account number is opened to everyone. So we are telling multinationals that allowing them to do business in the country is not a leeway of avoiding tax,” she noted.
She added that her goal was geared at encouraging women to be tax compliant advocates.
“We will go into industry and school to ensure that we catch the young ones early to adopt the tax compliance culture.
“This would improve empowerment and employment for more productive capacity and when you’re able to employ more people it would lead to an increase in tax. That is, companies do businesses, make a profit and pay their tax, so there is no tax without income,” Fowokan said.