Economy
Buhari Faults Nigeria’s Multiple Tax System
By Joseph Amah, Abuja
President Muhammadu Buhari has faulted the nation’s current multiple and overlapping tax system, saying it’s inefficient and creates uncertainty and instability.
The president, therefore, canvassed for efficient tax administration to boost the nation’s revenue base.
Speaking on Tuesday while declaring open the second annual National Tax Dialogue Week at the Conference Hall of the State House, Abuja, the president said he was worried at the current tax system in the country, characterised by fragmented administration, multiple and sometimes, overlapping taxes.
According to him, “Multiplicity of tax administration is as undesirable as multiplicity of taxes; it creates uncertainty and instability; and above all, it is inefficient.
”He, however, expressed his administration’s commitment to an efficient tax system in order to improve tax revenue in the country.
“In most tax-efficient nations, tax administrative processes and practices are harmonised within a single system.
”One key deliverable of this year’s tax dialogue is to promote synergy in tax administration among the different tiers of government.
”Harmonising taxpayer identification across the country is a good start; but we must do more to promote ease of doing business (including ease of tax compliance) in Nigeria.
“On our part, we have started by clarifying in the 2021 Finance Act that FIRS is the sole authority to administer tax for the federal government.
“This clarification became necessary in order to avoid taxpayers being burdened with multiple tax compliance obligations towards different agencies of the same government,” the president said at the dialogue with the theme ‘Tax Harmonisation for Enhanced Revenue Generation.’
In the face of dwindling revenues from commodities, President Buhari told participants at the tax dialogue that there is an urgent need to maximise domestic revenue within the extant tax policy and laws.
He, therefore, proposed improved tax revenue for the country which will not necessarily impose new tax rates on Nigerians.
“We all know that good intentions are not enough as they simply cannot pay for infrastructure, security or social amenities. We must therefore improve tax revenue without necessarily raising new taxes.
“Revenue from commodities, including crude oil, are too volatile and unreliable. Therefore, I pledge government’s support for any viable initiative for improving tax revenue that should emanate from this dialogue,’’ he said.
On Nigeria’s Tax-to-GDP ratio, the president declared that the country also needs to do more in securing a buoyant domestic revenue base for the country that bequeaths an enduring economic foundation, political stability and social harmony to the next generation.
“According to the Organisation of Economic Cooperation and Development (OECD), in its Revenue Statistics in Africa 2021, the average ratio of Tax-to-GDP of 30 selected African countries in 2019 was 16.6%, while Nigeria recorded a mere 6.0%.
“It is obvious that much needs to be done in the area of tax revenue mobilisation.
“It is my expectation that the discussions at this 2022 National Tax Dialogue will be focused on what we must do to maximise legitimate revenue collection and massively improve the Tax-to-GDP ratio,” he said.
On the importance of the tax dialogue, which was instituted by the Minister of Finance, Budget and National Planning, and the Executive Chairman, Federal Inland Revenue Service (FIRS), President Buhari noted that the first edition in 2021 was very productive and integral in influencing tax policy, as well as legislative and administrative changes that were introduced last year.
He added that the most important testament to the success of the first edition is the fact that the FIRS achieved 100% of its collection target in 2021 and surpassed N6 trillion revenue threshold for the very first time.
Congratulating FIRS on the achievement, the president assured Nigerians that the present administration would continue to maintain prudent management of the collective resources.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said the dialogue was designed to engage stakeholders in the Nigerian tax-space in meaningful discourse so as to glean information, ideas and experience in the aid of policy formulation and improved tax environment.
According to her, the main tax revenue objectives of the federal government include developing an economy that does not lean too heavily on resource wealth.
She explained that Nigeria’s economic history provides enough facts that resource wealth alone cannot lead to sustainable development and self-sufficiency.
She said: “The other tax revenue objectives are: to institutionalise a healthy tax culture among Nigerians. The right attitude towards taxation will enable every Nigerian to become a co-guardian of the tax system and the commonwealth.
“To create a participatory system of taxation whereby the taxpayers and other stakeholders understand and accept that they have equal stakes in the tax system.”
Also speaking, the Chairman of FIRS, Muhammad Nani, thanked the president for his directive to government agencies to enable FIRS connect to their ICT systems, noting that this singular pronouncement softened the grounds for the service to roll out its system for seamless acquisition of data.
He said: “We are confident that by the time all the agencies achieve 100% compliance with the president’s directive, Nigeria shall be the envy of other countries for tax compliance and domestic tax revenue mobilization.”
On the remittances of the service to the Federation Account, Nani announced that statistics from March 2022 Federation Account Allocation Committee (FAAC) meeting showed that out of a total revenue of N803.072 billion from all revenue agencies, tax revenue contributed by FIRS was N513.522 billion (63.94%), while non-tax revenue from all other agencies amounted to N289.55 billion (36.06%).
He noted that the average tax or FIRS contribution to FAAC in 2021 was 59.45%.
”I mentioned in my welcome address to the 2021 edition of the tax dialogue that the world had begun a tax race of which Nigeria must be a winner.
“The revenue profile of the country in 2021 has clearly shown that our continued survival as a nation depends on tax revenue.
”This trend is set to continue for some time to come. As such, all hands must be on deck to support the tax system and make it function efficiently.
“However, it is surprising that some people have begun to play politics with tax revenue generation.
“We humbly invite the president to step in to dissuade political tax gladiators to sheath their swords. Tax revenue is an inherently apolitical issue; it should be treated as such by all, irrespective of their political leaning,” the FIRS Chairman said.
The Securities and Exchange Commission (SEC) says it is organising a compliance summit for Chief Executive Officers (CEOs) and Compliance Officers to address Financial Action Task Force (FATF) and related issues.
The Director-General of SEC, Dr Emomotimi Agama, said this in a statement made available on Saturday in Lagos.
He said that the summit, with the theme, “Navigating regulatory challenges: Aligning with changes in FATF in the era of VASPS,” would be in Lagos on Oct.
21 and Oct. 22.According to him, SEC aims to equip capital market operators with the necessary tools and knowledge to thrive in a complex regulatory environment.
Agama said that the Nigerian Capital Market Institute (NCMI), a subsidiary of SEC, would hold the summit.
He noted that the summit would ultimately foster a culture of compliance and integrity in the operations of the participants.
“The aim is to equip capital market operators with essential insights and strategies to effectively navigate the evolving regulatory landscape.
“Attendees are to gain knowledge of understanding regulatory changes, clarity on the latest updates to FATF standards and how these impact Virtual Asset Service Providers (VASPs).
“They will also learn best practices for aligning their compliance programmes with new regulations, ensuring they meet international standards that enhance compliance frameworks in their organisations,” he said.
According to him, key objectives of the summit are regulatory compliance, understanding and implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations.
Others, he added, would include risk management, which encompasses identify, assess and mitigate risks associated with virtual assets and operational efficiency which would lead to enhanced internal controls, governance and compliance frameworks.
The director-general mentioned that the benefits of the summit include regulatory clarity, risk reduction, enhanced governance, competitive advantage and networking opportunities.
The welcome address at the summit is expected to be presented by Ms Frana Chukwuogor, Executive Commissioner, Legal and Enforcement, SEC Nigeria.
The opening remarks and overview of the summit will be delivered by Dr Agama while Ms Hafsat Bakari, Director, Nigeria Fraud Intelligence Unit(NFIU) will present a goodwill message.
Among the speakers expected at the event are, Mr Obinna Iwuno, Chairman, Stakeholders in BlockChain Association of Nigeria (SiBAN) and Certified Cryptocurrency Compliance Specialist and Investigator, Mr Ade Bajomo.
Also, Mr Zacch Adedeji, Executive Chairman, Federal Inland Revenue Service (FIRS), President, Fintech Association in Nigeria, Mr Peter Shodipo, and the President, Committee of Chief Compliance Officers of Capital Market Operators in Nigeria (CCCOCIN) among others.(NAN)
To end the week, the stock market rebounded from previous losses, gaining N74 billion.
Investor interest in MTN Nigeria, FBN Holdings, Guaranty Trust Holding Company (GTCO) and other equities lifted the market.
Notably, the market capitalisation opened at N56.014 trillion, adding N74 billion or 0.
13 per cent to close at N56.088 trillion.The All-Share Index also advanced by 0.
13 per cent, or 129.44 points, closing at 97,606.63, compared to 97,477.19 recorded on Thursday.As a result, the Year-To-Date (YTD) return increased by 30.54 per cent.
The market breadth closed positive, with 31 gainers and 19 losers on the floor of the Exchange.
On the gainers’ chart, Consolidated Hallmark Plc and Sterling Nigeria led by 9.
45 per cent each to close at N1.39 and N4.98 per share respectively.Mecure followed by 9.19 per cent to close at N10.10, Regency Alliance Insurance gained 9.09 per cent to close at 72k, while Fidson Healthcare Plc increased by 8.24 per cent to close at N15.10 per share.
Conversely, Deap Capital Management and Trust led the losers’ chart by 9.93 per cent to close at N1.36, NEM Insurance trailed by 9.71 per cent to close at N7.90 per share.
Daar Communications also lost 9.52 per cent to close at 57k, Tantalizers shed 9.09 per cent to close at 60k, while Dangote Sugar declined by 3.31 per cent to close at N31 per share.
Analysis of the market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 20.33 per cent.
A total of 304.43 million shares valued at N5.60 billion were exchanged in 6,950 deals, compared with 277.75 million shares valued at N4.65 billon in 7,091 deals traded in the previous session.
Meanwhile, Access Corporation led the activity chart in volume and value with 68.26 million shares valued at N1.34 billon.(NAN)
By David Torough, Abuja
The Nigerian Economic Society (NES) has decried Nigeria’s socioeconomic dilemmas, including; low personal incomes, dysfunctional education, healthcare systems, unemployment, rising inflation, poverty, amidst other critical issues.
This was part of the communique at the end of the association’s 65th annual conference held recently in Abuja with the theme: Socioeconomic Development in Nigeria: Imperatives, Implications, and Impacts.
It emphasised that the factors greatly contribute to insecurity, food scarcity, energy poverty, widening social inequality as macroeconomic instability and called on relevant stakeholders to urgently address the challenges.
President Bola Tinubu who was represented by the Vice President, Kashim Shettima through
Dr. Tope Fasua, underscored the
pivotal role of economists in shaping national development.
Tinubu reiterated the importance of their role to make the citizens feel integral and empowered, knowing that their contributions were crucial to the country’s development.
He urged them to approach the economy optimistically, stressing that their work was crucial, and that improvement was
always possible.
In his remarks, Minister of Budget and National Planning, Atiku Bagudu underscored the importance of socioeconomic resilience amidst global economic challenges.
He acknowledged the relevance of the conference theme, stating its timeliness in addressing Nigeria’s development needs.
On his part, Minister of Finance and Coordinating Minister of the Economy, Olawale Edun who delivered the keynote address on “Leveraging Economic Reforms to Leapfrog Nigeria’s Socioeconomic Development,” underscored the potential benefits of these reforms and stressed the need to better utilise Nigeria’s human and natural resources to spur socio-economic development.
He predicted that while structural reforms might cause short-term economic shocks, they would stabilise the economy in the long run, bringing hope for a brighter future.
In his presentation, the NES President, Professor Adeola Adenikinju who presented “Nigeria’s Socioeconomic Challenges: Lessons from the Structural Adjustment Programmes,” recommended:
Instituting an economic governance structure for the country, designating
some Ministries as economic ministries that qualified economists and allied professionals
must staff, adopting macroeconomic models to analyse the impacts of policies and assess
alternative scenarios.
Adenikinju also recommended; implementing export-led growth strategies by promoting value-
added exports and incentives for export-oriented industries and infrastructure, prioritising agro-allied industries to boost socioeconomic outcomes, implementing targeted subsidies or social safety nets to cushion vulnerable populations against the immediate impacts of reforms, amongst others.
The 65th NES Conference provided significant insights into Nigeria’s socioeconomic
development challenges and proposed actionable recommendations.
Participants emphasised the need for visionary leadership, policy synergy, and a commitment to long-term economic transformation to ensure sustainable development for Nigeria.
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