The Director General of Debt Management Office DMO,Dr. Bright Okogu has decried the poor state of Nigeria’s tax administration .He made his view known today at the Launch of the National Tax Justice Platform organised by CISLAC and its domestic as well as international partners at Bolton White Hotel, Abuja.
DG Z of DMO who was represented at the launch by Sarah Bwala said “ In the Baseline study on Tax, Tax Gaps, Analysis and Taxation in Nigeria, at least 71.4% of respondent rated the system as tax laws as poorly implemented with only 25.1% believing that the implementation standard is good, 1.9% other were indifferent. Over 71 per cent of Nigerians have rated the current regime of tax administration poor and called for a stronger political will on the part of elected political leaders and tax administrators to improve the efficiency of the system.
He added that “A Country can be assessed in terms of the ease of doing business in it using the incidences of regulatory controls and taxation of business activity.The Structure of the existing tax system in Nigeria and some of the inherent problems called for the decision to develop a National Tax Policy. The NTP provides a set of rules, modus operandi and guidance to which all stakeholders in the tax system will subscribe.”
In the DG’s view, “The burden of governance to guarantee economic stability in the light of pressure from private sector is increasingly becoming more challenging. The government’s support in sustaining the stability in these situations is usually in the formulation and implementation of policies to navigate safely those tumultuous periods. For the more proactive government however, the trend is to ensure that these policies are frequently reviewed and updated to ensure that current and foreseeable conditions are managed in a way that do not undeservedly affect the citizenry. The latter to me should always be overriding principle as we continue deliberations.”
Dr. Dereje Alemayehu,Chair, Tax Justice Network – Africa who addressed the audience noted among other things that though “Research has shown that refusal to pay taxes is high when potential tax payers see little or no return in terms of public services and investments, and that readiness to pay tax increases with improved service delivery. The lesson from this is really simple: Taxation is taking and giving!
The tax justice patform being envisioned Alemayehu said should ensure “There is a paradigm shift in development policy to ‘enhance linkages and plug leakages’ in African economies; A progressive taxation regime is in place that curbs tax evasion and abusive tax avoidance and at the same time ensures horizontal and vertical equity” and “An effective and efficient tax administration is in place which promotes non-coercive tax compliance so that transparent and accountable use of public revenue with a “virtuous circle” prevails: enhanced government responsiveness and tax payer compliance”.
In her remarks, Jane East, Country Manager, Christian Aid noted that “The link between taxation and development is fundamental. A functioning state must ultimately rely on its own revenues to meet the basic needs of its citizens. Using the tax system, the state can mobilise domestic resources, redistribute wealth and provide essential services and infrastructure. Tax builds and strengthens the social contract. Effective tax structures can help to improve governance, strengthening channels of political representation and reducing corruption.”
She added that “governments across the world struggle to collect enough taxes to fund essential services in a fair way. Southern governments in particular face serious challenges as a result of weak and under-resourced revenue authorities, large informal sectors, pressure to offer overly generous tax breaks, and the exploitation of tax loopholes by unscrupulous companies and rich individuals. Too often tax systems are skewed against the interests of the poor.”
Also, the Christian Aid Country Manager pointed out that, “ In NIGERIA, tax revenues account for less than 1% of the country’s Gross Domestic Product (compared with many other sub-saharan countries with an average of between 10 and 20%).
Adding that “As Dr Maju’s report reveals, the tax system in Nigeria is characterised by significant tax gaps – non-filing, under-reporting and under-payment. Tax evasion is pervasive. In part this is as a result of the population’s lack of confidence in the government to utilise its tax revenues fairly.”
She howver noted as well that “Christian Aid welcomes the fact that the establishment of this tax justice platform will focus on not only the promotion of a fair, effective, transparent and progressive tax system in Nigeria, BUT ALSO on the fair, effective, transparent, and developmental utilisation of the revenues generated.”
CITN President, Mr. John Femi Sunday Jegede in his goodwill message said “The Institute is indeed gladdened to be a part of history in the making with the launch of the National Platform on Tax Justice today. It is our expectation that the goals of the forum will be pursued with vigour and an unwavering commitment so that the ultimate goal to raise public awareness for a just and efficient tax system would be achieved. Hopefully, we will have cause, in the foreseeable future to look back on the activities of the forum and pat ourselves on the back for the successes achieved.”
“CITN, on its part, will, in accordance with the tenets of its enabling charter, continue to ensure that the tax system in Nigeria is professionally and administratively developed. We shall, at all time, continue to make input into the various tax reform bills at the National and States Houses of Assembly towards ensuring that the tax laws are in tune with present realities. Expectedly, our contributions have resulted in the “tax craze” among states in the country today which are beginning to exploit taxes as an important tool for economic transformation” the president said.
He however noted that “The Institute shall continue to partner with organisations, such as yours, which are making visible efforts at improving the tax system in our nation. Once again, I congratulate the leadership of CISLAC for this laudable and very expedient project. I see you as partners in progress in our collective drive to build a very viable and sustainable country that our children unborn would be proud of.”
