Stakeholders call for review of customs duties, taxes on trade
Stakeholders have stressed the need for government to review its laws on customs duties, taxes and harmonise administrative requirements in relation to procedures, predictability and communicate transparently, as well as enhance regulatory cooperation and coordination.
The stakeholders were gathered at a workshop on policy, law and administration of Value Added Tax, customs duties and the hotel occupancy and restaurant consumption law, organised by the Indirect Tax Faculty of the Chartered Institute of Taxation of Nigeria (CITN) in Lagos.
They noted that the absence of independent, verifiable and reliable data on Nigeria’s international trade in tangible goods is a sore point in gauging the effectiveness of its Customs function stating that importers face inordinately long clearance procedures and high berthing and unloading costs.
Managing Director, Taxaide, Bidemi Olumide, disclosed that Nigeria’s porous borders and the corruption that aids illegal international trade are credence to why official records cannot be relied on.
Olumide said the existence of several regulators with import and export procedures should be eradicated because the multiplicity of regulators in the approval of import and export procedures complicates procedures for traders in different sectors.
The Lead Partner, Tax and Regulatory Services, Deloitte West Africa, Yomi Olugbenro, said Nigeria is currently on a recovery mission and seems to be paying forced attention to tax for survival.Unfortunately, this seems to be happening at an inopportune time, especially for those hoping to make a kill on direct taxes.
He opined that indirect tax fits more appropriately in a recessed economy, a period when businesses are struggling with profits and individuals’ earnings are waning, while raising direct taxes is more likely to worsen an already bad situation.
“If anything, the appropriate fiscal policy would be to lower direct taxes, thereby increasing the disposable income of individuals and retained profits of businesses. A counter balance is then struck through indirect taxes and the multiplier effect of higher spending from increased disposable income may far more compensate for any potential decline in direct taxes..
“It is imperative that the numbers of agencies at the ports are reduced to remove red tape. This can be done by setting up a joint unit whose mandate would be to ensure the objectives of each individual agency is checked at a one-stop shop. This increases efficiency of trade and reduces the opportunity for unofficial taxation,” he said.
However, he noted that trade must be liberalised if customs duties is to be used to re-engineer economic growth.The Head of Litigations and Taxation, SimmonsCooper Partners, Bashir Ramoni, revealed that the flexibility in the administration and management of value added tax by the relevant authorities would further entrench the true fiscal federalism which is professed in the constitution by moving away from centripetal to centrifugal structure.
According to him indirect taxation is a tool for economic engineering world over, and for value added tax (specie of indirect taxes) to be effective and efficiently managed, it requires well-informed dominant ideas pursued and negotiated amongst the stakeholders in our federating units.
These dominant ideas, he said will develop into policies that shape the content of tax legislation which in turn determines the direction for administrators and managers of value added tax. This in doubt will improve the efficiency of tax system as it represents a viable source of government revenue in micro and macro economies.
Ramoni charged Federal Government to provide enabling environment for stakeholders in the federation to discuss how fiscal power may be shared and accelerate the amendment process in the constitution.