Collect VAT, withholding tax from legislators –  President, Chartered Institute of Taxation

By Haruna Salami
President, Chartered Institute of Taxation, Dame Gladys Simplice has called on tax collectors to collect value-added tax and withholding tax from constituency allowances of legislators at all levels of governance in the country.
She started this Tuesday at the 2020 Tax Week organised by the Chartered Institute of Taxation of Nigeria, CITN, Abuja, and District Society at the Merit House Abuja.
According to her “we all are taxpayers and we live in estates where we pay for everything. In some of these estates towards, the end of the month the gates are locked, you would not be allowed to go out if you have not paid your dues, you are held responsible.
“If we do the same thing from the ward to council to the house of reps to the Senate, we should hold them responsible. But you know why you are not doing it because you are not paying your taxes adequately as at when due. That is why you are not reacting. If you pay adequately as at when due, you would not sit down lackadaisically to see people spend tax money anyhow and leave them.
“Let me tell you, we need to take these things into our own hands. We need to react. People say I’m a revolutionary; I am not. Let me tell you what I did when I was a tax comptroller in Ibadan. It also goes back to the political will and the determination to achieve.
“For example, somebody said in their estate the road is bad. You can revolt in that estate, carry placards, call newspapers and make noise. I can assure you the people who were given that contract would be called back.
Simplice narrated what she did when she was tax comptroller both in Ibadan and Abeokuta because she needed to meet up with her target. “I sat down and I said the State Assembly members collect constituency allowances, don’t they?
In the same vein, National Assembly members collect constituency allowances. “Are there no tax implications? There are tax implications. FCT IRS chairman, it is your duty, even if they are not going to pay, they must pay withholding tax because constituency allowance is tied to projects. They must pay withholding tax and they must pay value-added tax, VAT.
“That was what I did and till tomorrow those taxes are being collected both in Ogun and in Oyo states. I went to address the State Assembly and I told them I have no business with how much they collect as constituency allowance, but they should just give my duty.
“What I asked my staff is to monitor if your constituency allowance is N10 million, 5% is VAT and 5% withholding tax. The 5% withholding tax. As it is not going to a limited liability company, we extracted it and it goes to the state and that opened the eyes of the accountant general of the state to know that there are withholding taxes attached to these constituency allowances?
“They started collecting and of course, I collected my VAT and my target got swollen up and I was bragging. This is one of the ways we can hold people accountable. Do your part, think outside the box, and do your best.
“As for CITN what do we do? We would advocate. Most of the amendments you see in the Finance Act were escalated from the CITN. Some of the things we are talking about today we will print and escalate.
“Two years ago we went to see the President, we raised some issues from our communique, and everything we escalated to him was approved. We asked him not to sign the compulsory Federal Mortgage Bank deduction from staff salary and he did not assent to it.
“Now you ask what your tax money is being used for. I keep saying government does not have a place to pluck money from except tax money revenue
She recalled a taxpayer that stormed her office and ranted saying he does not see what the government is doing for him with his tax. “I said okay, the government is not doing anything for you, and he imports serious building materials not ordinary materials but the type top politicians use, very fine Italian material.
“At that time it was November and December, I asked him all the materials he imports did he build the airports through which they were imported? Or how much tax had he paid to contribute to the building of the airport? He was just looking at me. I said even from the airport to Ibadan here, even if the road is not good how much is your contribution to that road?
“He was looking at me and I now asked if he was not going home for Christmas he said he must go home with his family. I said you will either fly or go by road, how much of your tax money? The man said nobody had ever explained to him like that. I am explaining it to you now, pay your tax, it is when you pay your tax that you will have the right to demand accountability.
“If you do not do your part you have no right to demand accountability.
We can only do moral suasion to the government asking them to create the right climate for people to do their business and asking the government to reduce the burden of taxation.
“A lot of it has been done in the Finance Act 2019. The minimum tax is seriously addressed. The removal of Small and Medium Enterprises, SMEs from taxation has been addressed.  Even the company’s income tax has been reduced. I think we should give kudos to this government, it is not enough but we can always canvass for more.
In his welcome address, Chairman Abuja and District Society CITN, Dr. Nwabuzor Emeke said “an important part of every country’s development process is the building of a social contract in which citizens pay tax and, in turn, receive public goods and services”.
Lead paper presenter, DR. Titilayo  Fowokan while speaking on the theme “Tax, Politics and Social Contract in Nigeria” said “tax compliance” by the citizens is low because they want to see what the government has done with the tax revenue. “If you collect one billion naira tax, we want to see one billion naira project”.
The Chairman, Federal Inland Revenue Service, FIRS, Mohammad Nami said it is not the responsibility of the tax administrators to ask how the taxes collected were spent, but that responsibility is for the taxpayers’.
Nami was represented at the CITN Tax Week by a Coordinating Director, Mr. Innocent Ohegwe.