By Naomi Uzor
Contrary to popular belief, the Lagos State Internal Revenue Service (LIRS), yesterday, said that Nigeria, and by extension Lagos State, does not have multiple taxation, but multiplicity of interface between taxable entities and tax authorities.
Chairman, LIRS, Mr. Hamzat Subair, stated this at the February breakfast meeting of the Nigerian-American Chamber of Commerce (NACC), tagged “Tax and Revenue Generation: The Lagos State Approach”.
He said: “What appears to be the most common regulatory challenge businesses and business owners encounter is perceived multiplicity of taxation. Multiplicity of taxes occurs when a tax base (or a single taxable income) is subjected to tax more than once either by the same tax authority or more than one tax authority.”
Subair who was represented by Director, Informal Sector, LIRS, Mr.Tola Saraki said the essence of taxation is to generate revenue from citizens and businesses to sustain state finances and develop infrastructure which is useful and beneficial to all citizens, adding that refusal or failure to pay is unlawful because tax is a product of extant statutes.
“The most common source of Internally Generated Revenue (IGR) in all countries is taxation. However, not every national government has been able to effectively exploit this great opportunity of revenue generation. Some have argued that the tax rate can affect how a business owner structures a company when it is created because taxation tends to reduce the overall profit of business,” he added.
Subair said continued implementation of reforms and adoption of international best practices in tax administration will reduce cost of voluntary compliance which will impact positively Nigeria’s ratings on the Ease of Paying Taxes Index and ultimately the Ease of Doing Business Index
President, NACC, Otunba Toyin Akomolafe, noted that governments all over the world require revenue to augment the spending needs to maintain an adequate level of public investment and social services. He added that though taxation may not be the most important source of revenue to the government in terms of the magnitude of revenue derivable from taxation, taxation is the most important source of revenue to the government, from the point of view of certainty, and consistency of taxation.