By Cynthia Alo
The Nigerian arm of the global brand in taxation, KPMG Nigeria, has tasked the Federal and State government to focus on improving the ease of paying tax as the only solution to improving the business environment and the country’s economy.
Speaking on ‘Planning with purpose, 2019 Economic Outlook’, Mr. Adewale Ajayi, a partner of Tax Energy & Natural Resources and People Services, stated that despite measures taken by the government to improve the ease of doing business in the country through ease of tax payment, many areas lacked attention.
He stated: “One would expect the government to remain resolute in its commitment to improving the business environment with particular interest on the Ease of Paying Taxes sub index under the ease of doing business index, in which Nigeria currently ranks 171 out of 190 countries, having moved up 11 places from the 2017 ranking.”
Ajayi advised that the governments should fast-track enactment of other components of the Petroleum Industry Bill, such as the Petroleum Industry Fiscal Bill and Petroleum Hosts Community Bill to have a promising competitive tax environment.
The National Assembly has only passed the Petroleum Industry Governance Bill (PIGP), which is awaiting the assent of the President.
Ajayi recommended other measures such as, “Reconstitution of the Tax Appeal Tribunal, TAT, ratification of outstanding double tax treaties and the domestication of the provisions of the BPES action points issued by the OECD, elimination of multiple taxes which stifle the growth and survival of small-medium-sized enterprises.”
Others are “A shift to indirect taxation, given the low cost of collection of indirect taxes. Government may consider reducing the income tax rate while increasing VAT rate to manage the burden of taxpayers, implementation of an effective tax risk management process, given the resource constraints faced by Relevant Tax Authorities, RTAs.