Survey: Taxpayers Support Reform Objectives, Cautious About Challenges, Economic Pressures

Dike Onwuamaeze

A joint survey by PwC Nigeria and the Lagos Chamber of Commerce and Industry (LCCI), on the business impacts of Nigeria’s current tax reform has revealed that taxpayers supported the reform’s objectives but are cautious about the challenges and economic pressures it pose due to administrative and constitutional changes.

The report, titled, “Six-month Review of Nigeria’s Tax Reforms,” was meant to capture feedback on the implementation of Nigeria’s new tax regime.

It focused on awareness of the tax reforms, the effectiveness of government communication, the performance of the new tax measures and stakeholders’ priorities for improvement.

Specifically, it said: “Taxpayers generally support the objectives of the reforms but remain cautious due to implementation challenges, economic pressures, and uncertainty around how some of the new rules apply in practice.”

Presenting the report, a Partner, PwC, Mr. Emeka Chime, said that pressure is built around administrative and constitutional changes and concern on how some of the provisions of the tax reform’s laws would be applied.

He said that key findings from individual tax payers showed that 42.8 per cent of the respondents viewed digital platforms such as TaxPro Max and Rev360 positively, which is an indication that digitalisation has made tax filing and compliance more efficient and accessible.

The survey revealed that 38.8 per cent of respondents believed that their tax burden has not reduced significantly.  

The report said that 39.7 per cent of respondents believed that transparency in tax collection has improved, adding that “citizens and taxpayers have clearer line-of-sight into how revenues are collected and utilised.​” ​

It also said that 41.5 per cent of respondents agreed that the tax laws are clearer and easier to understand. “However, there is still work to improve taxpayer awareness as 58.4 per cent of respondents believe taxpayer education should be top priority.”

On the other hand, the report that corporate organisations demonstrated a significantly higher comprehension of the new tax regime than individual tax payers.

It said: “In contrast to individual taxpayers, corporate decision makers demonstrate a significantly higher baseline of tax regime comprehension, with 95.24 per cent reporting between high or moderate awareness, while an isolated 4.76 per cent reported very low understanding.

“18.9 per cent of businesses regard the new VAT destination rules positively. The new VAT destination rules are clear and have not disrupted our supply chain. The large neutral response indicates that the full impact may not yet be evident, and some organizations are still in the implementation phase.

“40.9 per cent of respondents believe the tax reforms have had a positive impact on cash flow / working capital. While 54.5 per cent believe there has been no effect on their cash flow, the real positive is the significantly low number of respondents that have seen a negative impact (4.55 per cent).  

“Despite progress, businesses continue to experience compliance difficulties particularly around multiple tax obligations, overlapping state and federal levies, and lack of fully integrated information systems across tax authorities.”

It added that 42.2 per cent of respondents agree that the new Personal Income Tax (PIT) rates have reduced employee tax burden.

It said, “However, 42.2 per cent were neutral, which may suggest that some businesses have not yet observed a significant impact on payroll costs.” ​