President, Chartered Institute of Taxation of Nigeria (CITN), Teju Somorin, has said the National Tax Policy, approved by the Federal Executive Council (FEC) will address challenges facing the tax system.
Speaking during the 36th induction ceremony of the Institute in Lagos at the weekend, she described the tax policy document as a slim, simple and concise revised policy with clear implementation and monitoring strategies for stakeholders in the Nigeria tax system.
She said the new document has defined “tax” as “any compulsory payment to government, imposed by law without direct benefit or return of value or a service whether it is called a tax or not.”
Somorin said the policy has become necessary at this stage of Nigeria’s economic development and is consistent with the shift from direct to indirect taxes enshrined in the National Tax Policy.
She said the 2017 budget did not propose increase in taxes but provides for expansion of tax horizon so that more people will start paying tax. The budget, she further noted, did not recommend increase in value added tax (VAT) but increase in VAT payable on luxury goods such as Champaigne among others.
She recommended that since small and medium scale businesses are the engine of growth of every economy, especially in Nigeria where over 90 per cent of employers of labour, fall within this category, the qualification for the lower income tax rate applicable to small businesses should be reviewed in line with current economic realities.
“The income tax rate for small businesses should be further reduced as an incentive to encourage compliance and promote Micro, Small and Medium Enterprises (MSMEs)”, she stated.
She further recommended that a minimum threshold for VAT registration and compliance should be put in place in order to protect micro-businesses.
She said the National Economic Council has approved the implementation of the Voluntary Asset and Income Declaration Scheme (VAIDS) aimed at addressing high rate of tax evasion in the country.
“The VAIDS, which is likely to become operational next month, is hoped to boost the revenue portfolios of the Federal and State Governments. Indeed, FIRS is targeting an increase in tax contribution to the Gross Domestic Products to 18 per cent by 2020. The scheme will offer a window for those who have not complied with the extant tax regulations to remedy their positions by the provision of limited amnesty to promt voluntary declaration and payment of liabilities.
The scheme will also have incentives in place to encourage early participation. For example, taxpayers will be allowed up to three years to settle their tax liabilities,” she said.
She said the Stamp Duties Act (Amendment) Bill, 2017 is currently before the House of Representatives, undergoing legislative process.
“It seeks to expand the scope of the Stamp Duties Act and address the current ambiguities in the law. The Bill will also legalise the controversial imposition of stamp duty on bank deposits while the definition of a “stamp” has been expanded to include electronic, internet and Point of Sale (POS) transactions. Other proposed changes include: Substantial increase in penalties, compulsory use of postage stamp instead of adhesive stamp and Imposition of stamp duty on all forms of agreements. Government Integrated Financial Information System (GIFMIS),” she said.
Tag: CITN
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CITN: National Tax Policy will fix tax hitches
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How govt can diversify economy, by CITN
The Chartered Institute of Taxation of Nigeria (CITN) has urged the Federal Government to explore opportunities in other sectors outside oil to diversify the economy.
Its President, Dr. Olateju Somorin, who spoke during the institute’s 34th induction in Lagos, said the government’s push for a 20 per cent tax-to-Gross Domestic Product (GDP) is achievable, given the country’s inherent opportunities.
According to him, Nigeria’s tax-to-GDP ratio, currently estimated at seven per cent, makes it difficult for government to mobilise N4.8 trillion yearly out of the N5.6 trillion projected value in relation to the 2013 GDP figure of N81 trillion.
“This onerous task falls on professionals who must continually update and display the requisite skill set to offer top notch services to their clients and the general public.
“It is no longer news that marked decreases in oil prices have sent ripple effects on the economy- pressure on external reserves and impact on foreign exchange market, with government resorting to borrow N1.8 trillion to fund part of the 2016 budget,” he said.
Meanwhile a professor of accounting and President, African Accounting and Finance Association, Jane Modupe Ande, has blamed the complicity of tax practitioners for tax evasion in the country.
While urging the newly inducted professionals to make the difference, he said it is obvious that Nigeria can no longer rely on one source of revenue to develop itself, but must tap from the huge potentials in tax that has been exploited by those who do not wish the country well.
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CITN’s annual tax confab to focus on economic devt
The President/Chairman of Council, Chartered Institute of Taxation of Nigeria (CITN), Dr. Olateju Somorin has said this year’s institute’s annual tax conference will focus on ways of growing the economy and maintaining effective fiscal policy.
Speaking ahead of the conference holding in Abuja next week with the theme: “Fiscal Challenges and opportunities of the Nigerian Economy,” Somorin said Nigeria’s economic activity had always been concentrated in the oil and gas sector.
She said the uncertainties about the oil price looming very large on the global scene is translating to a daunting fiscal challenge for the government.
She said the manufacturing sub-sectors have not been spared as they have not been capable of meeting local demand or compete on the global export market, having been weakened by the rising scarcity of the forex, the absence of domestic cargo rail transportation in particular and disruptions in energy supply in general.
“Having considered all these challenges, it became imperatively clear that there is need for the Institute to use the platform of the 18th Annual Tax Conference to address and attempt to proffer empirical solutions to these challenges,” she said.
She said Nigeria has grown to a level that it does not need to wait for any organisation or country to assist in solving its fiscal and monetary challenges.
“Doing this would not only amount to exposing our government as a weakling with no direction, but would impact negatively on the country and the people. We align with President Mohammadu Buhari when he said his administration will enforce greater fiscal discipline, probity and accountability in all revenue generating agencies of the Federal Government, adding that government would take deliberate steps to enforce regulations that would stop financial leakages in generating more revenue to mitigate the effect of dwindling oil prices on the Nigerian economy,” she said.
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LIRS hires tax experts from ICAN, CITN
The Lagos State Internal Revenue Service ((LIRS) has engaged 1,200 members of the Chartered Institute of Taxation of Nigeria (CITN) and the Institute of Chartered Accountants of Nigeria (ICAN) as Tax Audit Monitoring Agents (TAMAs).
The TAMAs are authorised to act as agents of LIRS for tax audit and assurance purposes. The LIRS carried out a review of the appointment and operational procedure of the TAMAs in order to enhance efficiency in its audit exercise.
In a statement, the LIRS said their duty would be to collect requisite information during tax audit field exercises, collate, prepare and submit tax audit reports based on the facts gathered for use by the LIRS.
Executive Chairman of LIRS, Olufolarin Ogunsanwo, implored the TAMAs to demonstrate the highest level of professionalism.
“We believe you will demonstrate a high sense of responsibility and integrity in this noble assignment in line with international best practices as we hope to improve the internally generated revenue of the state and ultimately engender a sustained culture of voluntary compliance amongst tax payers in Lagos. I have no doubt in my mind that your professionalism will be of tremendous value during this year’s exercise and beyond,” he said.
The revised tax audit manual was also presented formally. It highlights the systematic steps of auditing, ethical standards and codes in line with international best practices.
“The TAMAs at the Training undoubtedly emerged to be the best in the stock of applications that we received.
The selection process was quite painstaking and took into consideration a number of preconditions, professionalism and track records in the most vital areas,” LIRS’ Board Secretary, Jimi Aina said.
Advising the TAMAs at the workshop, Director, Tax Audit, Bolaji Akintola, said.
“The Image and reputation of LIRS is key in tax audit, therefore we charge you to stand for what LIRS stands for, by avoiding any form of compromise, illegality, unprofessional conducts and shunning all under the table transactions.
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Govt pushes for 20% tax to GDP ratio, says CITN
The Chartered Institute of Bankers of Nigeria (CITN) has disclosed Federal Government’s plans on achieving a 20 per cent tax to Gross Domestic Product (GDP) ratio for the economy.
The CITN President, Dr. Olateju Somorin, who disclosed this at the 33rd induction ceremony of the institute, held in Lagos at the weekend, said achieving this would require that tax administrators and professionals to navigate the tax laws on behalf of tax clients to ensure equity and fairness in its application and compliance.
She said the task falls on professionals who must continually update and display the requisite skill set in order to offer top notch services to their clients and the general public.
Somorin said the institute on its part, recognises the need for continuous provision of a strong manpower base for the tax system and would contribute its fair share in this regard.
“It is pertinent to emphasise the place of taxation in national development at this juncture. This has become even more imperative in the face of falling crude oil prices and underperforming budgets as a result of paucity of funds from federal allocations. At the federal and state government level, there have been increased activities geared towards increasing internally generated revenue with different strategies being employed,” she said.
The CITN boss said while some states have given effect to the institute’s call for autonomy for revenue administration, others attempt to resort to self-help by making summary pronouncements on what tax payers should pay.
“For the avoidance of doubt, imposition of taxes is based on assessments, as is the convention with tax laws. These assessments provide the basis for arriving at the taxes being demanded. This makes for a better understanding and position of trust between the taxpayer and tax administrator. Let me equally reiterate our call that only tax professionals should head and administer agencies charged with revenue generation, especially at the Federal and States Boards of Internal Revenue,” she said.
“Only people possessing the right skills in taxation should do the job.This has become necessary if government is to be taken seriously in addressing the issue of low tax compliance and increased revenue generation.
“We recognise that as an institute, we do not possess compulsive powers to make government tow this line. However, we will continue to make our voice heard at every opportunity to drive home the message of professionalism”.
Dr. Somorin explained that as part of the mandate of the institute to standardise taxation practice in the country, the Nigeria Taxation Standard Board (NTSB) was inaugurated with the mandate to, amongst others, ensure standardisation of taxation practice and administration in Nigeria by narrowing down areas of differences in the treatment of tax matters.
“In accordance with our institute’s resolve to carry out its mandate with integrity and service, I find it very useful and appropriate here today to inform you that our institute, as a professional body, does not condone any form of unprofessional behaviour or unethical practice among its members. This is a statutory responsibility to which all of us subscribe. Just as a violation of the law in the larger society always invariably attracts commensurate sanctions, so is non-compliance with the provisions of the institute’s Code of Conduct,” she said.
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Govt pushes for 20% tax to GDP ratio, says CITN
The Chartered Institute of Bankers of Nigeria (CITN) has disclosed Federal Government’s plans on achieving a 20 per cent tax to Gross Domestic Product (GDP) ratio for the economy.
The CITN President, Dr. Olateju Somorin, who disclosed this at the 33rd induction ceremony of the institute, held in Lagos at the weekend, said achieving this would require that tax administrators and professionals to navigate the tax laws on behalf of tax clients to ensure equity and fairness in its application and compliance.
She said the task falls on professionals who must continually update and display the requisite skill set in order to offer top notch services to their clients and the general public.
Somorin said the institute on its part, recognises the need for continuous provision of a strong manpower base for the tax system and would contribute its fair share in this regard.
“It is pertinent to emphasise the place of taxation in national development at this juncture. This has become even more imperative in the face of falling crude oil prices and underperforming budgets as a result of paucity of funds from federal allocations. At the federal and state government level, there have been increased activities geared towards increasing internally generated revenue with different strategies being employed,” she said.
The CITN boss said while some states have given effect to the institute’s call for autonomy for revenue administration, others attempt to resort to self-help by making summary pronouncements on what tax payers should pay.
“For the avoidance of doubt, imposition of taxes is based on assessments, as is the convention with tax laws. These assessments provide the basis for arriving at the taxes being demanded. This makes for a better understanding and position of trust between the taxpayer and tax administrator. Let me equally reiterate our call that only tax professionals should head and administer agencies charged with revenue generation, especially at the Federal and States Boards of Internal Revenue,” she said.
“Only people possessing the right skills in taxation should do the job.This has become necessary if government is to be taken seriously in addressing the issue of low tax compliance and increased revenue generation.
“We recognise that as an institute, we do not possess compulsive powers to make government tow this line. However, we will continue to make our voice heard at every opportunity to drive home the message of professionalism”.
Dr. Somorin explained that as part of the mandate of the institute to standardise taxation practice in the country, the Nigeria Taxation Standard Board (NTSB) was inaugurated with the mandate to, amongst others, ensure standardisation of taxation practice and administration in Nigeria by narrowing down areas of differences in the treatment of tax matters.
“In accordance with our institute’s resolve to carry out its mandate with integrity and service, I find it very useful and appropriate here today to inform you that our institute, as a professional body, does not condone any form of unprofessional behaviour or unethical practice among its members. This is a statutory responsibility to which all of us subscribe. Just as a violation of the law in the larger society always invariably attracts commensurate sanctions, so is non-compliance with the provisions of the institute’s Code of Conduct,” she said.
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CITN: FIRS, McKinsey to raise tax revenues by N460b
The Federal Inland Revenue Service (FIRS) and McKinsey are working towards increasing tax revenues and adding N460 billion to Federal Government revenues in the next three years, President, Chartered Institute of Taxation of Nigeria (CITN), Dr. Olateju Somorin, has said.
Speaking at a budget seminar in Lagos, she said the FIRS and McKinsey initiative is one of the measures being taken to close tax gaps.
She said Messrs. McKinsey & Co. an international firm was engaged in 2014 to work with the FIRS to strengthen the tax body in tax collection in non-oil sector and provide technical assistance in the implementation of its capacity enhancement programme.
She said the global growth performance has been weak and there has been volatility in oil prices. Nigeria is part of the global economy and therefore susceptible to development in the rest of the world economy.
She said the 2015 budget is aimed at boosting the non-oil sectors of the economy and also to raise tax revenues.
“The introduction of a luxury tax regime buttresses the fact that oil revenue is expected to play a less significant role in 2015 and future years. We hope that government will implement the National Tax Policy and be consistent in its fiscal and monetary policies designed to diversify the economy and increase the country’s tax base,” he said.
Somorin noted that there are still leakages and incidences of non-remittance of requisite funds to Treasury by some agencies and that is why government issued an unequivocal directive to all revenue agencies to ensure remittances of their obligations to Treasury.
“In the short term, Government is determined to improve tax revenues not by increasing tax rates but rather by first, strengthening our tax administration. It is worthy of note to observe that Government aims to plug leakages, increase the tax base and improve tax collection efficiency,” she said.
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CITN urges govt on economic diversification
The Chartered Institute of Taxation of Nigeria (CITN) has urged the President-elect, General Muhammadu Buhari (rtd) to diversify the economy through the instrumentality of taxes.
Its President, Chief Mark Anthony Dike, said the apex tax body linked the victory of General Buhari to the belief, trust and confidence that Nigerians had in the change mantra that featured prominently during the process leading to his elections.
Dike in a statement, said the approval and implementations of the Nigerian Tax Policy document (NTP) would revolutionise the tax system as an effective galvaniser of resources needed for developmental projects.
He reiterated the confidence of the citizens that under his (General Buhari’s) leadership, Nigeria will maintain political and civil stability, the economy will develop, the living standards of the people will appreciably rise, foreign relations will constantly expand and the country will register great success in its developmental strides.
“Our Institute has meticulously studied the laudable programmes encapsulated in the manifesto of your party, the All Progressives’ Congress which you had always emphasised at all your campaign grounds across the nation. Some of those which caught our attention particularly are the readiness of APC to stabilise oil prices at $100 a barrel, provide free education to all, pay N5,000 every month to the poorest 25 million people, generate 40,000 megawatts of electricity in four years and payment of allowances to youth corps members, at least, a year after service,” the statement said.
Dike said good as these programmes are, the success of their implementation depends more on the ability of the new government to generate adequate resources needed to bring them to fruition. Successive governments had largely depended on oil revenue to run the Nigerian economy. However, the fact on the ground now is that Nigeria’s over-reliance on oil revenue has only helped to place her at the mercy of some powerful nations whose economy and politics now dictate oil prices.
He added that this unfortunate situation was further enhanced locally by the high rate of corruption, inefficiency of government officials, non-accountability of revenue, all which have assisted in the evolvement of informal taxation.
He also observed the lopsidedness in the way and manner national honours were being used to celebrate ineptitude and moral decadence by giving the highest awards in the land to dubious and corrupt people, even when it was obvious that those people had not contributed anything to the corporate development of Nigeria.
The Institute, he added, believed that tax compliance should be a major consideration for granting national honours.
“Once there is an allegation of tax evasion against a nominee, such person should stand aside until he/she is cleared by a competent Court of the land. As a matter of necessity, our Institute want to recommend the institution of National Tax Compliance Honours to complement the existing ones,” he said.
Dike further stated that CITN looks forward to partnering with the Buhari government not only in seeing to it that the tax system in Nigeria is run in the most professional and result-oriented manner that is necessary to providing the needed resources to realigning the Nigerian Economy to global reckoning but also to concert our efforts in the cause of peace and the brotherhood of all citizens of our great nation – Nigeria. “In due course, we shall be sending our positions on various issues in the Nigerian tax system for your consideration” he concluded.
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ICAN, CITN sign MoU on taxation practice
The Institute of Chartered Accountant of Nigeria (ICAN) and the Chartered Institute of Taxation of Nigeria (CITN) have resolved the long-drawn rift between the two bodies over the practice and regulation of taxation in Nigeria.
In an arbitration mediated by the Association of Professional Bodies of Nigeria (APBN), ICAN and CITN last week signed Memorandum of Understanding (MoU) at an elaborate ceremony to end the professional crisis, which had lingered for more than a decade.
The highlights of the MoU and terms of settlement provide that chartered accountants will be able to engage in the practice of taxation without further examination from CITN. However, CITN will serve as the specialty regulator for the taxation practice in Nigeria. Members of ICAN are expected to undergo induction process for membership of CITN.
President, Chartered Institute of Taxation of Nigeria (CITN), Chief Mark Dike commended the efforts of all parties in resolving the dispute.
“ My joy knows no bounds that a preventable dispute that lingered on for several years and which defied several mediations is eventually being laid to rest today through the signing of both the Terms of Settlement, ToS and Memorandum of Understanding by ICAN and CITN. This feat was facilitated by the astute and painstaking mediation efforts of our umbrella body, APBN,” Dike said.
President, Institute of Chartered Accountant of Nigeria (ICAN), Mr. Chidi Ajeagbu also commended the APBN for wading into the issue which had gone through the Court of Appeal and Supreme Court.
He said ICAN would work together with CITN to improve the practice of taxation and membership of the specialized regulatory body.
President, Association of Professional Bodies of Nigeria (APBN), Mr. Foluso Fasoto noted that when in 2005 a dispute arose between ICAN and CITN; APBN had intervened, relying on section 4(4) of the APBN constitution.
According to him, in spite of the fact that the issue has become a subject of court action, APBN did not relent in its efforts of mediation between its two member bodies.
He said APBN believes that the court should not come to solve the problems between professional members.
“It is on record that the APBN, through its Mediation Committee has resolved similar issues in the past. To mention but a few: Tte Nigerian Institute of Architect, NIA and the Nigerian Institute of Town Planners, NITP; the Nigerian Society of Engineers , NSE and the Nigerian Institute of Estate Surveyors and Valuers (NIESV),” Fasoto said.
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CITN seeks autonomy for state revenue services
The Chartered Institute of Taxation of Nigeria (CITN) has called on governors in the country to accelerate the mechanism for granting autonomy to State Internal Revenue Services (SIRS).
Its President, Mark Dike made this call during a courtesy visit to Kwara State Governor, Abdulfattah Ahmed, in Ilorin, the state capital.
Dike said: “It is becoming imperative for the state governments to focus more on redefining internal revenue drive by improving the efficiency of revenue collection and administration in their policies and programmes in the area of increased revenue generation. This can be best implemented with a State Internal Revenue Service that is autonomous and managed professionally by competent chartered tax practitioners.”
The CITN chief identified the merits of an autonomous revenue service body to include setting targets and having inspiration to attain them; better taxpayer enlightenment programme, simpler assessment and payment procedures, comprehensive and reliable database. Others are automation of processes, better remuneration, training and motivation of staff, accountability, foolproof tax clearance certification, improved relationship between the government and taxpayers among others.
He said the institute will be willing to assist in ensuring that these merits are not only attained but also sustained for improved internally generated revenue (IGR) for the states.
Ahmed commended the institute for its tenacity and spirited efforts in tax advocacy and awareness. He advised the Institute to sustain its advocacy drive towards ensuring that taxation becomes the number one revenue source for all tiers of government for the execution of their primary responsibility of providing social infrastructure for their citizenry.
“The importance of taxation to any serious economy cannot be over-emphasised as global oil prices are threatened everyday by happenings around the world. Forward-looking governments need to look inwards and take full advantage of taxation as a viable alternative source of revenue,” Ahmed said.
He said despite government’s plans to diversify its revenue base, the country’s fiscal and budgetary landscape had continued to be dominated by oil income. He, however, explained that the fluctuation in oil revenue had yet provided the country with a unique opportunity to reposition its tax system in order to make up for the shortfall arising from the fluctuating fortunes of oil revenue.