The convenience of the taxpayer and minimal compliance cost should guide the design and implementation of every tax in Nigeria.

A key feature of a good tax system is that the cost of administration must be relatively low when compared to the benefits derived from its imposition. There must therefore be a proper cost – benefit analysis before the imposition of any taxes and the entire machinery of Tax Administration in Nigeria should be efficient and cost-effective.

Nigeria’s tax system should be fair and as such observe the objective of horizontal and vertical equity as mentioned above. Based on the foregoing, there must be overwhelming reasons for granting tax incentives and concessions to some preferred sectors over others within the economy. Otherwise incentives and concessions shall as much as possible be general and apply to all tax-payers.

Taxes in Nigeria should be flexible enough to respond to changing circumstances. Prevailing circumstances should also be considered before the introduction of new taxes or the review of existing ones.

The Nigerian tax system shall at all times strive to minimise the negative impact of taxes on economic efficiency by ensuring that the marginal tax rates do not distort marginal propensity to save and invest.

Guiding Principles For Stakeholders – Roles, Responsibilities And Relationship Between The Stakeholders

Stakeholders are those persons / entities that contribute to and derive benefits from th country’s tax system. This broad definition therefore includes every Nigerian citizen an resident, corporate entities, Government at all levels and government agencies a stakeholders in the country’s tax administration.

However, for the purpose of the National Ta Policy, certain groups of persons have been identified as relevant stakeholders. It is therefor necessary to identify these relevant stakeholders before discussing the guiding principles which would be applicable to them.

The relevant stakeholders in the Nigerian tax system can be broadly categorized into th following: The Executive Arm; Presidency, Federal Executive Council in general and the Ministries of Finance, Information an Education in Particular National Economic Council, National Council of States , State Governors, State Executive Council in general and the Commissioners of Finance, Information and Education in particular  As earlier stated, the National Tax Policy shall be guided by the provisions of Nigerian1s Constitution in respect of all fiscal issues.

Accordingly the following shall be the guiding principles of the Stakeholders in the Nigerian tax system: adherence to Constitutional Federalism and the Rule of Law at all times; strict adherence to Constitutional provisions relating to fiscal matters; adherence to the concept of Fiscal Federalism and separation of powers in relation to fiscal matters; recognition and respect for the rights and powers of each level of Government in relation to collection and control of revenue within its jurisdiction; strict adherence to the provisions of tax legislation in the administration of taxes; Commitment to the enforcement of tax laws in a legal and Constitutional manner; commitment to the peaceful resolution of all disputes and respect for Judicial , pronouncements on disputes submitted for adjudication; commitment to the creation and sustainable development of a stable, secure and workable tax system for Nigeria; and commitment to the Unity, Development and Progress of One Nigeria, in the acknowledgment that the Tax System can be used as a major pivot for achieving National evelopmental Goals.

Further, there are certain universal principles which are necessary to ensure cordial interaction between stakeholders in the administration of taxes in Nigeria. These principles include: affirmation and acknowledgement of the importance and contribution of all stakeholders in the administration of taxes in Nigeria; provision of specific and general feedback by all stakeholders, in a proactive manner on issues and developments that are relevant to tax administration in Nigeria; ensuring that the principle of good faith is observed by all stakeholders, especially between the taxpayer and tax authorities on one hand and the government and the authorities on the other; fairness in the treatment of all stakeholders by each other.

This is particularly relevant in the allocation of resources and consideration of each party’s viewpoints. Having set out the general guiding principles for the stakeholders, we proceed to a discussion of their roles and responsibilities as follows:

The Executive Arm

The Executive Arm of Government encompasses the organs of Government at all levels, which are involved in the implementation and enforcement of tax laws. We have set out each organ’s roles and responsibilities; The Presidency is the organ of Government that is responsible for initiating policy and implementation and enforcement of laws at the Federal level.

The Presidency also oversees the activities of Government agencies at the Federal level. In this regard, the Presidency would be required to provide leadership and direction on all tax matters to the Ministry of Finance, the Federal Inland Revenue Service, the Nigeria Customs Service and other relevant revenue generating agencies involved in tax administration in Nigeria.

The Presidency shall provide necessary approvals (or assist in obtaining such approvals from the relevant bodies), funding and be responsible for the appointment of competent personnel to head the relevant agencies and also initiate the process of drafting tax legislation for enactment by the· Legislature.

The Presidency would also be responsible for signing and implementing all International and Regional treaties entered in to by Nigeria. In addition to the above, the Presidency shall be responsible for moderating the relationship between the different organs of Government and provide all the necessary tools for effective and efficient tax administration in Nigeria.

The National Council of States (NCS) is created by the Nigerian Constitution and assigned the responsibility of advising the President on the exercise of his powers ..• with respect to certain matters specified in the Constitution.

While taxation or fiscal issues are not specifically listed in the Constitution as matters upon which the NCS can advise the President, the Constitution however provides that the NCS may advise the President on such matters as the President may direct. Accordingly, when required, the NCS shall provide relevant advice to the President on matters pertaining to tax and fiscal issues.

Given that the NCS is made up of distinguished and experienced persons such as former Presidents and Chief Justices of the Federation, current State Governors, the President of the Senate and Speaker of the National House of Assembly, it is expected that the NCS would provide deep and varied insight on the matters upon, which it would be called to advice the President.

State Governors would also be required to provide advice to the Federal agencies and bodies responsible for tax policy, legislation and administration in the country. Overall, it is expected that State Governors shall provide additional oversight in respect of all tax and fiscal matters at State and Federal level.

The National Economic Council (NEC) was created by the Nigerian Constitution and assigned the responsibility for advising the President on economic matters. Given that taxation plays a major role in the economy of the country, the NEC would be required to deliberate on and identify policies, which can be implemented and assist the President draw up road maps for the development of the Nigerian economy with particular emphasis on taxation and other fiscal related issues. The NEC would also be required to co-operate with similar advisory bodies to ensure the consistency of advice provided to the President on fiscal issues.

State Governors are expected to playa similar role to that of the Presidency at State level. They would be responsible for the development of State Tax Policy which shall be complementary to the National Tax Policy. In addition, they are responsible for the enforcement of Federal and State tax laws in the States and carry out general oversight functions on tax and revenue authorities at the State and Local Government level.

State Governors would be required to provide guidance and direction to the State Ministries of Finance, the State Boards of Internal Revenue Service and other relevant revenue generating agencies involved in tax administration in the States. They should also ensure adequate funding and autonomy is provided to these agencies in the discharge of their functions.