The Chairman of the Joint Tax Board, Mr. Muhammad Nami, has said that the Federal Government will harmonize multiple taxes administered by the three tiers of government in a bid to incentivize compliance and increase tax revenue.
NAMI made this known at the meeting with Chairmen of States Internal Revenue Boards, in Abuja, Monday afternoon, with theme, ‘Harmonization and codification of taxes at the National and Sub-national levels: Key to achieving a tax friendly environment in Nigeria’
He said his team was moving from the level of discussion to practicalising the much-needed tax harmonization in the country.
Mr. Nami explained that that President Bola Tinubu expressed his commit to ensuring necessary arrangementd were made to encourage more Nigerians to comply with their tax obligations, which has been identified as remedy to creating tax revenue.
He said, “we have moved from just talking about harmonizing the various taxes. We are now at the level of actual harmonization. President Tinubu is very serious about addressing the problem of multiplicity of taxes.
“I have addressed the State Governors at the National Economic Council and we have all agreed that it better to harmonise the taxes, have fewer taxes and effective collect them through encouraging tax payers to comply.
“As the new administrations attempt to address the many socioeconomic challenges facing the nation on many fronts, it becomes imperative for all the levels 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 presents 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.
“In recent years, especially since the dawn of our current democratic dispensation, the importance of taxation has continued to be reiterated and reinforced by all, and the critical role that tax-revenue plays in funding government and governance cannot be over-emphasized.”
Mr. Nami, the Chairman of the Federal Inland revenue service stated that the organization would protect small businesses, assuring that informal sector operators were brought into the tax net.
He was specific that business with less than N25 million turnover were tax exempt.
The Chairman, Presidential Fiscal Policy & Tax Reforms Committee, Mr. Taiwo Oyeleye, asserted the need to drastically reduce the number of taxes imposed on members of the Nigeria public and businesses in the country.
He explained that multiple taxation was causing low tax morale in the country, as well as discouraging investments, while creating room for corruption and making doing business difficult.
He said, “Many MDA (Ministries, Departments and Agencies) Specialicised Purpose vehicles are set up and allowed to collect taxes and taxes are building up every day.
“Last year alone, there were four new taxes. My team did a study and found out that there were 44 Bill in the works at the National Assembly with various types of taxes.”
Mr. Taiwo cited that multiple taxation always resulted in low tax morale of the people and that many business owners viewed government’s imposition of multiple taxes on them as being against such businesses.
He added, “Ironically, the more taxes you have, the lower the tax revenue you collect. A lot of Nigerians pay taxes that don’t get to government. Businesses are made to pay taxes from their capital. That is the surest way to ruin those businesses.”
The tax expert made a comparison of tax revenues between Nigeria and South Africa’s tax revenue and concluded that tax earnings by the latter were way far more that what Nigeria earned annually, despite the fact that the country administered many more than South Africa.
He revealed that South Africa raised about N78.2 trillion equivalents in tax revenue in 2022 alone, which according to him, was more that all the budgets of all three tiers of government in Nigeria put together.
In 2022, Nigeria’s federal, states, local governments’ entire tax revenue stood at N15. 2 trillion.
Mr. Taiwo said that the top officials of the Nigerian society from where the chunk of the Personal Income Tax revenue should have come from either don’t pay taxes at all or pay much less than they should.
He said such situation must be urgently addressed, to the significantly raise tax revenue, and drastically cut borrowings.
