The Federal Inland Revenue Service (FIRS) has said Nigeria needed hard reforms to be able to benefit maximum returns from taxes.
The Chairman of FIRS, Mr. Muhammad Nami, said that only hard reforms would make Nigeria to attain optimum tax revenue collection capacity across the federal, state and local government tax authorities.
He spoke at at the 153rd meeting of the Joint Tax Board (JTB) held on Monday in Abuja, with the theme: “Harmonisation and codification of taxes at the national and sub-national levels: Key to achieving a tax friendly environment in Nigeria.”
Meanwhile, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said Nigeria’s current multiple taxation is causing low tax morale in the country, as well as discouraging investments, while creating room for corruption and making doing business difficult.
Oyedele said the country’s over 45 taxes deplete returns on investment, erode business capital, with a capacity to trigger business collapse and introduce complexities to the ease of doing business.
Nami, while delivering his address to the Board, 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.
“As the new administration’s attempt to address the many socio- economic 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,” Nami said.
The JTB chairman further stated that Nigeria needs to adopt more efficient, more effective, more inclusive, and more sustainable measures to optimise tax revenue for all the levels of government.
Nami assured the executive chairmen of state revenue authorities at the event that the government was on the pathway to eradicating multiplicity of taxes as a core of its overall economic regeneration objectives.
On his part, Oyedele said the solution to the country’s revenue challenges is 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.
He added that for the government to raise more revenue, it needs 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.
“We also need to clarify on 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,” Oyedele stated.
The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms advocated for 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.