Oluchi Chibuzor with agency report
The Chartered Institute of Taxation of Nigeria (CITN) has said multiple taxation and abuse of tax incentives were challenges impeding development of the Nigerian taxation system.
The President of the institute, Dame Gladys Olajumoke, made this known at the second Annual International Academic Conference on Taxation, organised by CITN in collaboration with Babcock University.
The News Agency of Nigeria (NAN) reported that theme of the conference was: “Taxation and Business Sustainability.”
Olajumoke, said many of the tax incentives granted by government had not achieved commensurate benefits for the economy, saying that in some cases, the incentives were abused by investors.
She noted that tax incentives and waivers, if granted at all, should be sector-based and granted through tax laws so as to promote transparency.
“It should also be streamlined with respect to pioneer status, import duty waivers and double dipping for income exemption. Incentives should be sector-based and industry-0focused to ensure a level playing field,” she said.
Olajumoke, lamented the abysmal tax compliance culture in Nigeria, which she said must be reversed to enhance the taxation system in operation.
According to her, in the midst of the abysmally low tax compliance levels, there was also the cry from corporate entities about double and multiple taxation.
She said businesses, especially Small and Medium Enterprises (SMEs) had been greatly affected.
“Regrettably, the current tax-to-GDP (Gross Domestic Product) ratio, a global measure of tax effort of 6.1 per cent is rather too low.
“This ratio is one of the lowest in the world compared to 23 per cent in Ghana, 25 per cent in South Africa and 39 per cent in Brazil, to mention a few. Evidently, we have an abysmal tax compliance culture,’’ she said.
Olajumoke, noted that without the creation of wealth, people could not pay taxes and recommended that multiple taxation and earmark taxes should be reduced to the barest minimum.
“Multiple taxes make Nigeria uncompetitive for investments and make the tax system extremely cumbersome.
“It should be noted that there is no quick fix or magic wand to increasing tax revenue.
“We need to sustain investments in critical national sectors such as power, transportation, agriculture, education and security. These are required to stimulate productive activities and attract investments,’’ she said.
In his keynote address, the Vice-Chancellor, Babcock University, said governments needed to implement sustainable economic policies and business models which would foster favourable environment for SMEs.
Tayo, said all economic policies must be built around sustainability concept in which tax policy was not an exemption.
According to him, the importance of tax regulations cannot be over-emphasised.
He noted that the political, economic and social development of any country depended on the amount of revenue generated for the provision of infrastructure in that given country.
“One means of generating the amount of revenue for providing the needed infrastructure is through a well-structured tax system.
“Tax is a major player in every society of the world. The tax system is an opportunity for government to collect additional revenue needed in discharging its pressing obligations.
“It offers itself as one of the most effective means of mobilising a nation’s internal resources,’’ Tayo said.
Prof. Godwin Emmanuel, Chairman, Conference Committee, said the conference provided opportunities for participants to deliberate on economic issues and proffered solutions to enhance the taxation system.
Emmanuel, said the committee looked forward to generating insightful and robust ideas that would be beneficial to government at all levels, particularly in tax administration, revenue generation and proposed fiscal policy initiatives.