President Muhammadu Buhari has expressed concern at the current tax system in the country characterised by fragmented administration, multiple and sometimes overlapping taxes.
The president spoke Tuesday in Abuja while declaring open the second National Tax Dialogue Week themed: ‘’Tax Harmonisation for Enhanced Revenue Generation”.
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He said: ‘’In most tax-efficient nations, tax administrative processes and practices are harmonised within a single system.
‘’One key deliverable of this year’s tax dialogue is to promote synergy in tax administration among the different tiers of government.
‘’Harmonising taxpayer identification across the country is a good start; but we must do more to promote ease of doing business (including ease of tax compliance) in Nigeria.
‘’On our part, we have started by clarifying in the 2021 Finance Act that FIRS is the sole authority to administer tax for the Federal Government.
‘’This clarification became necessary in order to avoid taxpayers being burdened with multiple tax compliance obligations towards different agencies of the same government.
‘’Multiplicity of tax administration is as undesirable as multiplicity of taxes; it creates uncertainty and instability; and above all, it is inefficient,’’ the president said in a statement issued by his spokesman, Femi Adesina.
President Buhari told participants at the tax dialogue that there was an urgent need to maximise domestic revenue within the extant tax policy and laws in the face of dwindling revenues from commodities.
He, therefore, proposed improved tax revenue for the country which will not necessarily impose new tax rates on Nigerians.
On Nigeria’s tax-to-GDP ratio, the president said the country also needed to do more in securing a buoyant domestic revenue base of the country that bequeathed an enduring economic foundation, political stability and social harmony to the next generation.
He further spoke on the importance of the tax dialogue, which was instituted by the minister of finance, budget and national planning, and the executive chairman, Federal Inland Revenue Service (FIRS).
President Buhari said the most important testament to the success of the first edition of the dialogue was the fact that the FIRS achieved 100 per cent of its collection target in 2021 and surpassed N6 trillion revenue threshold for the very first time, assuring Nigerians that the present administration would continue ‘’to maintain prudent management of our collective resources.’’
In her remarks, the minister of finance, budget and national planning, Hajiya Zainab Ahmed said the main tax revenue objectives of the federal government included developing an “economy that does not lean too heavily on resource wealth.”
She said Nigeria’s economic history provided enough facts that resource wealth alone could not lead to sustainable development, self-sufficiency and sustainable.
The chairman FIRS, Muhammad Nani, who thanked the president for his directive to government agencies to enable FIRS connect to their ICT systems, said this singular pronouncement softened the grounds for the Service to roll-out its system for seamless acquisition of data.
On the remittances of the service to the federation account, the FIRS Chairman announced that statistics from March, 2022, Federation Account Allocation Committee (FAAC) meeting showed that out of a total revenue of N803.072bn from all revenue agencies, tax revenue contributed by FIRS was N513.522bn (63.94 per cent) while non-tax revenue from all other agencies amounted to N289.55bn (36.06 per cent).
The Chairman said the average tax or FIRS contribution to FAAC in 2021 was 59.45 per cent.
He, however, expressed surprise over the politicisation of tax revenue generation and called on the president to wade in and dissuade the political tax gladiators to sheathe their swords.
“Tax revenue is an inherently apolitical issue; it should be treated as such by all, irrespective of their political leaning, ‘’ he added.
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