Don seeks review of tax collection

By Damola Kola-Dare

A review of the way taxes are collected by the three tiers of government may result in better use of tax revenue for the country’s development, Prof.Abiola Sanni has proposed.

Prof. Sanni, professorial chair in Tax and Fiscal Matters, spoke on the topic: “Fresh Agenda for Fiscal Federalism-A Proposal” during  the second Annual Lecture of the Board of Trustees of Lagos State Professorial Chair in Tax and Fiscal Matters,  in conjunction with University of Lagos (UNILAG), Office of Advancement, where a book entitled “A Compendium of Nigerian Tax Cases”,was presented to the general public.

He noted that the three tiers of government should be given the liberty to impose taxes and also determine rates.

“Rather than having a long list of federal and state taxes with relatively modest revenue potentials, all the three levels of government should be given access to impose income and consumption tax and determine the rate within agreed parameters,”he said.

Sanni noted that there were only nine federal taxes, one state tax and two local government taxes and submitted that the long list of taxes contained in the Taxes and Levies (Approved List for Collection) was misleading.

He added that despite the existence of nine federal taxes, “there is none to which the Federal Government is exclusively entitled to its revenue the way states are entitled to the revenue from the three federal taxes being administered by it.”

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He, therefore, posited that there were constitutional and statutory obligations on the Federal Government to share the revenue from the six state taxes administered by its agencies with the states.

“Rather than conceiving fiscal federalism in terms of inter-governmental contestation and rivalry, the local, state and Federal Government should be vested with power to concurrently use income and consumption taxes under a cooperative arrangement where each can determine the rate of taxes.

“The income tax may follow the American model where a county where a taxpayer resides has the first taxing right. The local income tax however will be a flat rate or a percentage of income. This gives the local government the incentive to build a database of its residents and improve infrastructure in order to attract more people to their locality,” he said.

In his speech, the Vice Chancellor, Prof. Oluwatoyin Ogundipe, lauded the Lagos State Government for endowing the professorial chair.

He also appealed to alumni of the school to continue to attract more development projects to their alma mater.