‘Taxation can fight corruption, economic woes’
Experts have said that the new national tax policy is capable of reducing the number of taxes to less than 20, and the number of agencies reduced or merged to only one per level of government.
The policy is also capable of growing tax to Gross Domestic Product (GDP) ratio from 15 to 20 per cent by 2020, curbing non-compliance with existing tax laws and discouraging the use of tax havens.
Besides, it can also help create low tax rates for small and medium enterprises with exemption to the poor providing robust information, proper utilisation and transparent reporting for the citizenry.
This was disclosed by Partner, West Africa Tax Leader at PricewaterhouseCoopers (PwC), Taiwo Oyedele, at a joint seminar organised by the Chartered Institute of Taxation of Nigeria (CITN) and PwC Nigeria in Lagos on Monday.
He posited that if duly complied with by all citizenry and monitored closely, it will serve as an instrument to fight corruption and resolve the country’s economic woes.
Oyedele, who doubles as Dean, Direct Tax Faculty, CITN, said tax is the lifeblood of the economy. Revenue in Nigeria is so small; the little we collect is either wasted or stolen. Therefore, we have wastage and corruption as our next problem.
“The reason why I said tax can help us solve problem is that tax can help to raise revenue. When people steal or waste money, a lot of it liable to taxes. They are not exempted from tax like Esta-code is taxable. If you use tax to force people to present information about the income and revenue they have earned and therefore in some cases they make it public, then people are more careful in stealing next time,” he said.
Giving an analogy, Oyedele said: “if a person has a house and has not paid personal income tax, he could be jailed if found guilty. It is a criminal offense if you did not declare your income and pay your taxes rightly, which is even in the constitution. Combined effect of tax can be the sole reason why we begin to solve all Nigerian problems.”
Co-Founder and Lead Partner, BudgIT, Oluseun Onigbinde, said government’s spending plan contains some high points, including the allocation of substantial funds to critical infrastructure and social services.
Onigbinde noted that borrowing substantially to reflate the economy is equally promising at face value, but with an increasingly tight domestic capital market environment, government may struggle to evade being in the red.
He stressed that there is a need to block all leakages, while expanding Nigeria’s revenue base, otherwise, the country risked languishing in self-inflicted fiscal subjugation, which could further escalate the current economic recession into a much undesirable and undeserved depression.
In her remarks, President CITN, Dr. (Mrs) Teju Somorin, urged government to curtail its spending, stating that the expenditure profile of government in some cases may not be reasonable.
“We have to be reasonable with the expenditure we spend. The issue of transparency and accountability is key for every level of government.” “We should be accountable in every facet of our lives. We should try as much as possible to leave good marks in everywhere and everything we do,” she added.