…wants big businesses evading tax fished out

By Gabriel Ewepu

ABUJA – A tax group called Tax Justice and Governance Platform, TJ&GP, has urged the Federal Capital Territory Administration, FCTA, to reduce tax burden on the informal sector.

While making a presentation tagged ‘On-boarding of the Tax Justice and Governance
Platform -FCT’, Chinedu Bassey, explained that the Platform is an association of loose individuals and groups interested in engaging issues related to tax justice and promoting fair, just, equitable and progressive tax regime in Nigeria, and its governance structure is made up of Civil Society Legislative Advocacy Centre, CISLAC, ActionAid Nigeria, International Budget Partnership, IBP, Christian Aid, Oxfam Centre for Democracy and Development, CDD, and Nigeria Labour Congress, NLC.

According to Bassey, “The TJ&GP is basically concerned about issues of tax expenditure
regime and its management; No clear framework on informal sector taxation; Inclusivity in the process of policy making and the tax administration; increasing revenue loss to illicit and inappropriate financial flows; multiplicity of taxes; gender equity and implications; use of unauthorized officials; tax administration issues; digital tax an inconsistent data issues; and tax evasions by multinationals and high net worth individuals.

“The goal is to ensure socioeconomic justice through an equitable fair tax system in Nigeria.”

The Senior Programme Officer, International Budget Partnership, Chika Oko, speaking on the sidelines of the on-boarding of TJ&GP, underscored the importance of tax, and described it as the sustainable means of generating resources for development, which makes the poor have access to basic services and development as the resources are used to provide healthcare, water, agricultural, educational, security services including infrastructural development.

Oko said: “Tax Justice and Governance Platform, TJ&GP, as the name implies, is focused on tax transparency, tax accountability, tax equity. How do we generate enough resources to be able to deliver the kind of services that people rely on? And that is the role that taxation plays.

“So tax still remains the most sustainable means of generating resources for development. And Tax Justice is interested because without those resources, the poor will not usually rely on public services, will not be able to have access to basic services like health, agriculture, education, and so on and so forth. So the platform has a whole lot of role to play.

“When it comes to the FCT, we have the FCT Internal Revenue Service, we also have the FIRS, so we have federal tax issues as well as the FCT tax issues that need to be engaged, and so there is a whole lot about ensuring that people pay what they are supposed to pay in taxes, and that low-income earners are not overburdened unduly.

“So this is what the Tax Justice Platform will be working on with research, with tax sensitization, education, advocacy, working very closely with governments.

“We hope that the platform will be able to contribute to their qouta to strengthening taxation at the Federal Capital Territory and in Nigeria generally.”

However, she said the government should see how to ensure tax evasions by big businesses are uncovered in order to reduce a whole lot of taxes and levies on the small businesses in the FCT.

“I am also concerned with the informal sector. The informal sector is really quite a complex sector when it comes to taxation, because they really don’t fall within that regulated sector, so it’s a bit difficult to pin them down.

“And so because of that, a lot of irregularities are going on there. You have big businesses who hide in the sector and are not paying what they should pay in terms of taxes and levies and all that.

“But then within that sector too, you find very small and micro businesses, people who are just surviving, making a living, they live from hand to mouth, and these people are subjected to multiple taxes, multiple levies from different angles, both state and non-state actors.

“So you find that a lot of documented and undocumented payments are being made. That is a major concern to us, because we want to see that everyone pays their fair share of taxes. That is the focus of the Tax Justice and Governance Platform, everyone paying their fair share of taxes.

“So that means that those that are not paying and hiding in the informal sector, there should be a clear strategy for identifying them and getting them to pay their fair share.

“And then there should be a strategy for exempting those that should not even be paying at all. People who are hardly making anything, it is important that those people also pay their fair share, and paying their fair share may mean they may not pay at all, they are exempted from those kinds of payments.

“So it is important that as tax justice advocates, we look at everything with a balanced perspective to ensure that the informal sector has clear rules and regulations for their taxes that are fair and equitable, and benefits all taxpayers”, she added.

Meanwhile, she said the group backs government’s tax reform as it has been their expectation and advocacy over the years.

“Definitely, there has been a whole lot of progress in that area. Tax reform, that’s the kind of reform that we have been pushing for and really advocating.

“So we have had the four bills that have been passed. So these bills, once the President assent to them, we believe that a whole lot of transformation is going to happen within the tax system.

“And so the role of civil society in that area is to ensure that there is adequate sensitization, which needs to be ongoing because a lot of changes will happen. So we will need adequate sensitization, we will need people to really be prepared to be able to adapt to the new system.

“It will also require collaboration among government agencies, sharing of data and information, so that we have a system that is equitable and transparent and accountable”, she added.

Also, speaking on the sidelines, the Programmes Coordinator, Social Action Nigeria, Botti Isaac, asserted that the informal sector contributes about 70 per cent of revenue to the nation through tax, therefore, deserves more care and attention.

“So this is the first time we’ll be having this kind of group set up within the FCT, with the focus on informal sectors within the FCT because we recognize that the informal sector constitutes over 60 per cent of the labour force and revenue from the informal sector also constitutes about 70 per cent of the revenue that the nation records, and these are the people who have been levied with different kinds of taxes, charges, fees and all of that.

“And the impact of even the money they are paying, they are not feeling because they are not having that access to governance goods, good roads, transport system, basic things, markets, and yet they are the ones bearing the burden of taxation.

“So how can we begin an advocacy that helps to address and limit the burden of taxation on the informal sector and also be able to have the informal sector properly captured in such a way that their contribution into economic development is acknowledged and felt.

“And then such that the revenue that is coming from the taxation on the informal sector can actually be traded to tangible goods, tangible services, that’s why they call it tax for services, that the people in the informal sector, which constitute the majority of the people in this society are actually benefiting from”, Isaac said.