Nigeria loses $18bn annually to tax evasion, money laundering, others ― CISLAC

tasks tiers of govt on accountability

By Olasunkanmi Akoni

The Charted Institute of Taxation of Nigeria, CITN, has attributed the low tax culture among taxable adults and businesses in Nigeria to lack of accountability and transparency in the expenditure of tax money by tiers of government.

Making this claim at the 2021 annual tax lecture in Lagos last weekend, Chairman of CITN, Ikeja, Mr Funso Abidakun, made reference to a recent research by the Nigeria Economic Summit Group, NESG, which revealed that more than 81 per cent of taxable Nigerians do not pay their income taxes as and when due thereby, accounting for low revenue from taxes.

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The research showed that of the tiers of government on whose shoulders tax collection is reposed, local governments and their officials are among the most untrustworthy, followed by the state governments and the tax officials.

NESG, while condemning the seeming national apathy of Nigerians on payment of taxes, said the figures available revealed that there are 20 million registered taxpayers in the country, scoffing at the figure which seems paltry compared to the resumed country’s population of nearly 200 million people.

It attributed the trend to “ironic twist to the distrust that pervades the environment when it comes to paying taxes, dues and levies to a government that does not command the public trust.”

Abidakun therefore, urged governments, especially the state governments to correct the ills that are denying the country of its collectible revenues from taxes by showing justification for taxes being collected and change the ‘sour tax narrative’ in the polity as well as fight corruption holistically in the tax system.

According to him, “Most taxable adults believe that it is unwise to pay taxes to entities that do not translate taxes to services, or to officials who divert same to personal use.

“It is the duty of CITN, as a professional body to educate the society on reasons why they should pay tax and what government is doing with the taxes being collected.

“Every budget year the Federal Government prepares budget giving fiscal intention of government in the coming year. In December 31, 2020, Federal Government signed the Finance Act and comes into effect from January 1, 2021. The Act did a lot of amendments to personal income tax, company income tax, VAT, and other tax law to fine-tune grey areas in tax system designed to support the implementation of the 2021 Federal   budget of economic   recovery and   resilience.

“The reason is not farfetched, tax is dynamic you can not be using the law that has been obsolete, hence, the Ned for upgrading of the law which we are bringing to the knowledge of the general public which also informed the choice of the theme.

“For example, the minimum wage of N30, 000 and below does not pay tax that shows government recognizes the fact that poor people should not be bothered about tax payment.”

On the reason for low tax income, Abidakun, while maintaining that, tiers of government were not really doing their biddings in terms of justification on tax payment, stressed that the social contract between government and the tax paying public should be respected and upheld.

His words: “One important thing that I need to say here is that there is a social contract between government and the citizens that pay tax.

In return citizens expect government to perform and provide minimum basic standard of living, such: as qualitative education, health, power, road infrastructure, among others.

“If there are no good roads, hospitals, portable water supply, functional public transportation, and other basic amenities, there will be indifference to tax payment by the public.

“Because, when taxable public keeps hearing government officials embezzling billions of money it   naturally, will discourage and demoralise them in performing their civic responsibility of paying tax. That is why we are bringing to the knowledge of the public their rights on tax payment.

“Government in Nigeria should display high sense of accountablity, transparency in tax administration and must live to expectations if it desirous of generating needed revenue from tax. 

The era of ineffective utilization of tax revenue for public use is gone. Government must justify the tax by being collected from the public.”

However, “We want to make the public realize that it is when they pay tax that they will have the audacity to challenge government and demand to see what they are doing with the tax revenue. If they don’t pay tax they don’t have locus-standi to question government on their spendings,” Abidakun stated.

On the rationale for organising the lecture, he said, it aimed at bridging the gap between professionals and the taxable public so as to be on the same page.

The lecture was delivered by a financial expert, Mr. Taiwo Oyedele, fiscal policy partner and Africa tax leader. Participants at the event include: Tax practitioners, tax administrators and members of the public.

Meanwhile, a financial expert, mr. Taiwo Oyedele, speaking on the theme of the lecture, listed the general implications of the amended finance act for the economy to include: Countercyclical fiscal measures to stimulate growth, improved ease of doing business, support for SMEs and vulnerable individuals, food security: incentives for agriculture.

Others are: Expanding the tax base and widening the tax net: Tax intelligence, exchange of information and use of technology, fiscal efficiency, such as: Ministries, Departments, Agencies, MDAs, expenditure to revenue ratio and procurement reforms, revenue impact to federal and subnational, among others.

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