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Experts task government on simplified, business-friendly tax system

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Tax

With the uncertainty in crude oil prices and Nigeria’s recurring budget deficit and rising debt burden, experts have called on the federal and state governments to address the concerns in the nation’s tax policies, laws and administrations to increase earnings.

They stressed the need for government to review promptly its tax laws and leverage technology to aid the process, while tackling alleged multiple taxations.

The experts, who converged at the fifth edition of the National Tax Debate, an initiative of the University of Lagos’ law students, held at the school’s campus, advocated the need for government to evoke the rule of law in tax administration, stating that the law should set the conduct of service for tax management in the country.

The Director, Fin Insurance Company Limited/Union Insurance Brokers Limited, Afolabi Elebiju, said there is need to simplify Nigeria’s tax system such that its compliance burden becomes light, stressing that the simpler the process, the less people are discouraged from their tax obligations.

Speaking on the theme, “Taxation: building a nation on taxes”, Elebiju said the simplicity of Nigeria’s tax system is one of the drivers of competitiveness in terms of attracting global capital.

While calling for public education and mass awareness to help solve some of the problems associated with tax compliance, he, however, noted that our tax system would remain challenged over how to be more business-friendly.

According to him, we will continue to challenge ourselves with more and more ideas, leverage technology, artificial intelligence; engage data analytics to see how these things could help even in tax administration.

Elebiju, who was the guest speaker, said: “Stewardship and accountability are part of the reasons why people are so keen on tax. What we noticed from the anti-corruption initiative of the federal government is lack of trust among the leaders and managers of the tax revenue. This should stop.

“We should make sure that we respect the rule of law in tax administration. The law is supposed to be an impartial arbiter that sets the standards of conducts for practice. And therefore, while the taxpayer is supposed to comply with the law, the taxman must basically comply with the law in carrying out his duties.

“Here, the role of the judiciary is very critical. First, in making sure we have well-thought-out decisions that represent what the law really says. Those kind of decisions instill confidence in the taxpayers and the business community”.

He also advocated the removal of anti-business provisions in the country’s tax laws, saying: “A very notorious example is the Excess Dividend Tax. This provision is so unfair to my view because the time you arrive at a situation where you have no tax to pay or your tax is minimized is also a function of the tax provision.”

Elebiju, said provisions like that of the Excess Dividend Tax deter investments, advising that we should rather look at how we can make sure that our tax system is fair and not punitive.

He said the timing for the Value-Added Tax (VAT) increase from five per cent to 7.5 per cent might not be right, and that the spiral effect of such might do more harm to Nigerians.

According to him, rather than increase VAT at this time, government should look at how to take off subsidy on petrol, sell off or privatize some of the national assets and save the money for other things.

Earlier in his welcome speech, the President of the Unilag Tax Club, Olabode Akindele, said 18 teams from universities across the six geo-political zones participated at the initial rounds of the debate leading to the four that made it to the final.

Akindele, added that future debates and discussions would focus on issues of continental or sub-regional concerns and the need for collaborations amongst countries in continents.

“The future would be troubled by discussions on how to jointly build countries in a continent and across continents. The future would be focused on dissecting and discussing concepts such as Double Tax Treaties and Multilateral Tax Treaties and sub-regional revenue efforts,” he said.

According to him, the National Tax Debate would one day metamorphous into a West African Tax Debate.


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