Hold government accountable for your tax money, FIRS urges Nigerians
• Stakeholders Decry Plan To Tax Digital Assets
The Federal Inland Revenue Service (FIRS) has urged Nigerians to always hold their elected representatives accountable for the taxes they pay.
This was as the Blockchain Technology Association of Nigeria (SiBAN) yesterday expressed dissatisfaction with the plan to tax digital assets under the proposed 2022 Finance Bill without the government ensuring that the relevant regulators are working together to ensure there is consistency in the treatment of digital assets in Nigeria and the tax treatment under the proposed 2022 Finance Bill.”
Director of Emerging and Special Taxes, FIRS, Mrs. Amina Ado, who spoke during a programme tagged, ‘Tax in the Present Nay Nigeria,’ in Abuja on Thursday, said there was need for citizens to begin to ask their governors and local council chairmen questions about what they are doing with the allocations they get on monthly basis from Federation Account Allocation Committee (FAAC).
The event, which was organised by the Government to Citizens Interface in collaboration with the FIRS, brought together tax payers, tax administrators and government agencies.
Ado said the FIRS announces how much it collects every month, adding: “The idea behind that is to encourage citizens to say ‘okay, if this much was collected and shared among the three tiers of government, what was it spent on.”
She also said Nigerians would pay their taxes if budgetary allocations are tailored to solve their needs and they can see the projects.
“We need to make sure that funds are used judiciously and in a way that will reduce the cost of governance. Yes it’s true the Federal Government is saddled with a lot of responsibilities, but it has to find a way to execute all these projects so that people can see them clearly. It is not just the hard infrastructure but also run the economy in a way that there will be confidence for people to invest because it is only when they invest that we can get the taxes,” she said.
While encouraging citizens to always pay their taxes, she said doing so was an unavoidable duty. She stressed: “If we don’t pay tax, the government is forced to borrow money. In 2021, the Federal Government received only about N4.6 trillion but it spent N12 trillion, which means it borrowed about N7.3 trillion. That borrowing has a strain on the interest rate, which businesses will pay. So businesses that don’t pay tax, in one way, they incur higher interest rates because government has to borrow. If we don’t pay our taxes to state governments, we end up paying the taxes through inflation because the cost of goods will go up simply because the government is borrowing more.”
Also speaking, Director of Inland Revenue Department of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Mrs. Udodirim Okongwu, said Nigerians should have the courage to ask questions about how government revenues were being spent by those they were entrusted to.
“The money is shared on a monthly basis among federal, state and local governments. You know how much each state or local government is receiving. Each of us seated here come from one local government or the other. You can then ask them to account for what they were given,” she said.
In his remark, the convener and Senior Special Adviser on Political Matters to the President, Mr. Bode Gbore, said the event was organised to open the channel of direct conversation between the government and citizens.
He added that, “it has proven that Nigerians are interested in making contributions to the development and well being of the nation.”
SiBAN spoke in reaction to the 2022 Finance Bill, which aims to bring all sectors of the economy into the tax net, including capital gains tax from digital assets, cable undertakings, lottery and gaming businesses.
The proposed bill states that “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets and incorporeal property generally.”
Speaking at Binance End of the Year Dinner, held in Lagos, President of SiBAN, Senator Ihenyen, said the decision comes as a surprise to many players in the industry because the use of cryptocurrency is currently being restricted in the banking and finance system of the nation as ordered by the Central Bank of Nigeria (CBN).
He stressed on the need for the Ministry of Finance, CBN and other agencies and regulators to come together and have a round table discussion on what is best for the country.
“Before looking at introducing capital gains tax in the country, let the players understand where they are headed so everyone can be on the same page in the issue,” he said.
Ihenyen stated that there were clear inconsistencies and lack of synergy with the financial service industry because the government has not taken a stance on what it wants to do about technology in that space.
“The CBN, Securities and Exchange Commission (SEC) and Ministry of Finance are all saying different things. We can see this in the redesign of the naira, introduction of e-naira and plan to task crypto currencies and digital assets which is contrary to what the CBN is looking at,” he added.
Director for East Africa Binance, Nadeem Anjarwalla, who expressed excitement over the increase in adoption of the platform, noted that Africa’s interaction with blockchain has established some important use cases and opportunities, which has unlocked the importance of financial inclusion.
On regulation, he called on the government to pay attention to areas like anti money laundering legislation, KYC Pi and implications of technology and digital coin to the nation. He said there was need to build awareness with regulators to form sustainable regulation for the industry.
“We think regulation is very important for greater adoption and when awareness spreads technology becomes more adopted,” he said.