Amosun, CITN harp on voluntary tax compliance
• It’s a two-way affair, stakeholders insist
Taxation has been described as the catalyst of modern economy, just as resource endowed and commodity dependent countries have been put at near collapse due price volatility.
But for Nigeria, the revenue crisis that hit the economy as its major earner – crude oil suffered price shock, has now put government’s income plans on taxation, making it appeal to voluntary compliance.
Ogun State Governor, Senator Ibikunle Amosun, who made the observation at the just concluded 19th yearly conference of the Chartered Institute of Taxation of Nigeria (CITN), said it has also become important to expand the tax net and block leakages.
Declaring the conference open, the governor urged everyone to support the fight against tax avoidance and outright evasion, reiterating that states cannot do anything now without tax.
“It is a shame that our tax-to-Gross Domestic Product is too low compared to other countries, despite our population and business activities. If you don’t pay, you have no moral right to challenge government. It is in our interest to pay,” he said.
However, he sounded a note of warning to his colleagues to think outside the box, as they cannot continue to depend on the allocations with the dwindling fortunes of the national income.
The President of CITN, Dr. Olateju Somorin, who corroborated the governor’s call for tax compliance, noted that the social contract imposes on the citizens the obligation to pay taxes regardless of their support for the sitting government.
But Somorin, who noted that states are expected to provide public goods, lamented that in a society where the citizens lack access to basic amenities, there is an obvious display of stupendous wealth by public officials.
She said that the conference was to reawaken the consciousness of the public officials and institutions, as well as citizens to the ensuring that all keep the rules of the social contract.
Urging a reorientation to tax compliance, she warned that any government that fails to show evidence of tax revenues risks losing legitimacy, mandate and authority as sovereignty resides with the people.
The former Dean, Faculty of Administration, University of Uyo, Prof. Ntiedo Umoren, government must revert to the fundamental principles of taxation, where the system is seen by the citizenry as a social contract between the government and the people.
According to him, here are significant challenges associated with tax administration in Nigeria, including the lack of sufficient political support, as many elites do not even pay tax.
There are large informal sector outside the tax net; multiple taxation; leakage and diversion of tax revenue; lack of accountability for tax revenue and insufficient government impact on citizens.
He said there would not be meaningful tax policy where taxes are assessed without any input from the taxpayer, as it negates the provisions of the basic cannon of equality.
The situation, according to him, will be an arbitrary imposition of an amount by the assessment authority that is totally unrelated to the economic status of the taxpayer.
However, the Federal Inland Revenue Service (FIRS), affirmed that the situation of the economy now leaves the authorities with no other option than to focus on taxation.
FIRS therefore, charged tax professionals to renew commitment and play their roles properly, particularly, developing new platforms that would ease payment or compliance.
It noted that among the newly enlisted 814,000 taxable entities, there is only a low number that can really pay tax, as some are actually incapable with the economic situation.
It also said it has developed series of e-platforms to ease payment, with tax receipt now fully automated, while tax clearance will be automated in about three weeks from now.