Nigerian tax Institute, CITN, wants tax laws simplified

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COMMUNIQUE: Nigerian tax institute, CITN, wants tax laws simplified

The Chartered Institute of Taxation of Nigeria (CITN) has recommended that authorities should work together to realise simplification of present complex tax laws to make the laws understandable and implementable.

This is a part of the resolution of CITN 2019 ANNUAL TAX CONFERENCE, according to a statement from the body on Friday. 

Below is COMMUNIQUE of the meeting signed by its President, Cyril Ikemefuna Ede, FCTI

Background

The Nigerian quest for economic prosperity has become more urgent today than ever before. If macroeconomic goals of government is to be realised for promotion of welfare of the citizenry, she must cultivate all economic and social tools available at her disposal. On the back of a milieu of challenges that has beset this development effort, the need to galvanize appropriate policy variables for achieving the required social and economic transformation cannot be overemphasized.

This was fodder for the just concluded Annual Tax Conference of the Institute which centred on “Unlocking the potentials of Taxation for National Development”. This drew participants from within and across the Sub-Saharan Continent with a guest presenter from Uganda.

The Conference had six plenary papers, including the lead paper, three panel sessions as well as two papers in a breakout session.

Discussions centred on the broader role of taxation as an essential tool for promoting economic growth and development, with highlights and various submissions made, in terms of policy, legal and administrative prescriptions for various stakeholders in the economy vis:

Executive Arm of Government should:

1. Adopt taxation by representation to encourage consultations across all divides for more informed and responsible governance;

2. Set the tone from the top by making political leaders pay their fair share of taxes and ensure Ministries, Departments and Agencies account for taxes collected as part of galvanizing prospective and existing taxpayers;

3. Ensure government economic policies in generating revenue are matched with tax reforms that encourage growth through Executive orders and sponsorship of legislative bills capable of promoting entrepreneurial development;

4. Work with Business Enabling Environment Secretariat to simplify taxes on businesses in order to attract foreign direct investments;

5. Revisit the Dotun Philips study group report for possible action on aspects that have not been fully implemented;

6. Set up mechanisms to review existing treaties and enter into more treaties with other developed economies of the world for synergy and release of additional Avoidance of Double Taxation Treaties to improve the Nigerian economy; and

7. Facilitate the creation of the Office of Tax Simplification (OTS) to continuously review and simplify the complex and ambiguous provisions in the various tax laws and to simplify tax forms.

The National Assembly should:

1. Action all tax bills for purpose of allowing taxation achieve its fiscal potency latent within it;

2. Enact pro-entrepreneurial laws in order to nurture and develop entrepreneurial initiatives for achievement of full employment with concomitant creation of wider tax bases;

3. Address the regress nature of the Value Added Tax (VAT) by including more items under the exemption list and giving clarity to existing ones whilst also considering progressivity in the VAT burden through the taxation of class of luxury items on graduated rates;

4. Assist the Executive close loopholes in taxation of the digital economy through enactment of provisions that captures this commercial sphere;

5. Consider relaxing oaths of secrecy clauses, as far as possible, in order to allow technology gain traction; and

6. Enact laws that help to make public Institutions run more efficiently without becoming a drain on the National treasury

Tax Authorities should:

1. Harness all stand-alone information silos through deployment of technology in the tax space in order to drive tax efficiency;

2. Ensure that States publish quarterly data of revenue collection by tax types;

3. Publish information annually about the number of taxpayers, the potential tax collectible, size of tax targets at the State and Local Government/Local Council Development Area level and performance in collection;

4. Address challenges of taxation of informal sector through tax education and sensitization, data mining of membership records of Trade Associations and the presumptive tax regime;

5. Encourage sound tax practices by providing incentives to tax practitioners that adhere to the highest ethical codes for handling the affairs of taxpayers’ right as well as incentives to Taxpayers with high level of tax compliance.

6. Address tax injustice in the country by the creation of Tax advocacy department at the Federal Inland Revenue Service and all State Internal Revenue Services;

7. Consider incentivizing their staff through a robust performance and merit-based system;

8. Address the Entrepreneurs’ burden of multiplicity of taxes and multiple taxation to preserve the growing businesses and attract investors in order to contribute to national development and economic growth.

Private Sector should:

1. Ensure collaboration with government in order to bring in the informal sector for expansion of the tax base;

2. Embrace good corporate governance that promotes responsible tax behaviour considering that there is nexus between Corporate Governance and tax compliance;

3. Ensure that their boards lead by example through a good tax paying culture and setting the tone for a tax culture that cascades down the line;

4. Develop ethical codes for managing organisational tax behaviour in order to hold Corporate Boards and organisations accountable to the highest standards of compliance with the tax system; and

5. Establish structures such as ‘Board Tax Compliance Committee’ with oversight roles for evaluating tax management against ethical tax behaviour within organizations