The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, on Monday said the federal government was prepared to finally eliminate multiple taxation to encourage investment and raise tax revenue for critical infrastructure.
Unlike in the past when successive administrations had paid lip service to addressing the issues of multiple taxations without action, Nami said, “This is not another promise that will not be fulfilled.”
Speaking at the opening of the 153rd meeting of the Joint Tax Board (JTB) with the theme: “Harmonisation and Codification of Taxes at the National and Sub-national levels: Key to Achieving a Tax Friendly Environment in Nigeria,” Nami, who is also the Chairman of the board, said President Bola Tinubu would on Tuesday inaugurate a committee constituted to look into tax harmonisation.
The FIRS chairman also noted that he had personally engaged with state governors to solicit their support in order to realise the task in good time.
He added that the committee would start work immediately.
Ironically, Nami said the multiplicity of taxes was not in the interest of the economy as it often leads to less revenue generation.
He said going forward, the objective was to streamline these taxes, and block leakages in the tax system in order to have more revenue for the tiers of government.
The FIRS boss said the JTB now has the mandate to ensure that taxes were harmonised before now, adding “But we are lucky to have a new administration that from day one has indicated interest” in the harmonisation drive.
He added that the FIRS is spending a lot and investing in partnership with trade unions in the marketplaces to ensure that the informal sector is brought into the tax net.
He said the move was also to ensure that services and goods which are exempted from taxation in the informal sector are not taxed.
He insisted that for the county to attain optimum tax revenue collection capacity across the federal, states, and local government tax authorities, the country must make hard but necessary reforms that would yield long-term benefits.
Nami, in his address, stated that for progress to be made in taxation, tax authorities must continue to explore and adopt measures and innovative initiatives that will lead to the optimisation of tax revenue for all levels of government.
He said, “As the new administration attempt to address the many socioeconomic challenges facing the nation on many fronts, it becomes imperative for all the levers of state to shake-off any lethargic antecedents and focus on the goal of a national resurgence.
“The unique and privileged offices we occupy as drivers of the nation’s tax administration processes present us with a rare opportunity to take hard, but necessary decisions that are expected to yield long-term benefits and add immense value to our collective prosperity as a nation.”
He pointed out that in recent years, especially since the dawn of the current democratic dispensation, the importance of taxation has continued to be reiterated and reinforced by all, adding that the critical role that tax revenue plays in funding government and governance cannot be overemphasized.
Nami said, “However, as we continue to make progress in our unique model of taxation, it is appropriate that we continue to explore and adopt measures and innovative initiatives that will lead to the optimisation of tax revenue for all the levels of government, in more efficient, more effective, more inclusive, and more sustainable ways.
“It is only by achieving this, that our efforts as tax administrators can trigger the manner of activity required in the productive sectors of our economy, towards achieving the immense economic potentials that we are capable of.”
He, however, assured Executive Chairmen of State Revenue Authorities present that given the thrust of the current administration’s tax policy direction, the country was on the pathway to eradicating multiplicity of taxes as a core of its overall economic regeneration objectives.
Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, said multiple taxation was causing low tax morale in the country, and discouraging investments while creating room for corruption and making doing business difficult.
He said the solution to the country’s revenue challenges was not to introduce more taxes, but to focus on the few taxes that are high yielding, noting that with these, tax authorities would be able to collect far more than is currently being collected.
Taiwo pointed out that for the government to raise more revenue, it needed to get to a point where the total number of taxes collected at the federal, state and local government levels would be at a single digit.
He said, “We also need to clarify taxing rights. We need to integrate tax collection functions—that is, all revenues that are to be collected must be collected by a single revenue agency. Government must also do well to fund our tax agencies well. We also need to harmonise revenue administration and simplify our approach to tax compliance.”
Among other things, he urged the country’s tax authorities to use more technology, review the country’s constitution and tax laws, as well revisit Nigeria’s concept of fiscal federalism.
Also speaking to journalists, Secretary of the JTB, Obomeghie Nana-Aisha, said the purpose of the meeting was to harmonise all tax collections and remove all uncertainties that discourage voluntary compliance.
She noted that people have been made to pay all manners of taxes both legal and illegal, adding that some taxes don’t actually go to the government.
Aisha said the objective was to also rid the system of the proliferation of tax and non-tax collectors.
She also said there would be lots of public sensitization so the people are aware of what to pay and where they pay their taxes.
She said the aim was also to enable seamless payment of taxes and further enhance the ease of doing business in the country, which had been a problem in all the 36 States of the federation including the FCT.
She said, “We are gathered here to actually put our hands on the issue and practically bring the harmonization to bear in the Nigerian tax system so that we are able to make the tax environment friendly to all and sundry in Nigeria.”
James Emejo and Aisha Kabiru in Abuja