BY EromoseleÂ Abiodun
The Managing Director and Chief Executive Officer of FSDH Merchant Bank Limited, Mrs.Â HamdaÂ AmbahÂ has called on the federal and state governments to immediately reform tax administration in the country in order to encourage local and foreign investors to invest in the country.
Ambah,Â who described the current process as burdensome, said the federal and state government must reform tax auditing and inspections in a way that does not encourage corruption.
According to her, â€œTaxation in Nigeria is really unbearable; I am not suggesting that people should not be paying tax. I am suggesting that the systems should be streamlined and it must be done in a way that it does not actively encourage corruption. Financial institutions are more burdened by the tax system in Nigeria because of the number of tax inspections that we have to go through. I also appreciate the need for government to ensure that things can be done properly.â€
She added: â€œIf people have to do the right thing concerning taxes there has to be boundaries, what do I mean by that?Â theyÂ send people to go and do tax audit that dates back sometimes to 10 years. Nobody is saying they should not do that but when you have done that, there should beÂ an end to that. Just like the acting President said in the executive orders on ease of doing business, there has to be a time limit to everything.Â Similarly if you come and do an audit,Â there has to be an end, so that when you haveÂ doÂ one you cannot come back and do another one.â€
Furthermore, she said:Â â€œWe have a situation where they come this year they do a 10 years audit, they come next year they do 11 years audit, which means we are back to where we were before. Sometimes I wonder how corporates cope with having to devote a certain number of staff to constantly work with tax authorities all the time. Some companies are fortunate to have adequate staff but all can afford that.
â€œCan you imagine an SME employing just 10 people having to engage a tax consultant every time? And they are different agencies in the state and federal government demanding for multiple taxes. We have to understand the effect it has on the ease of doing business and how it pissed off some other people who wants to invest in the country.Â When government calls on its nationals not to stash money abroad but invest in the country, efforts should be put in place to encourage people to do so. This is investors are cautious of risks that erode capital and the risk in Nigeria cannot be quantified. Because of the difficulties in doing business here, leaving money in the bank sometimes becomes very attractive.â€
She also praised the Central Bank of Nigeria (CBN) for the bold steps it has taken toÂ stabiliseÂ the economy.
â€œThere is a somewhat fragile recovery underway; we applaud the many decisions that have been taken by the federal government, especially the CBN, to improve the environment. The recovery will take a little bit more time; we should all collectively exercise patience. We are on the right path but nobody should think that the economy will automatically right itself. Our progress as a nation is a long term journey, we have made some mistakes in the past and we should not expect that those mistakes will be corrected overnight.Â The focus should be that weÂ are on the right path, â€œshe stressed.