The Nation Newspaper

Tag: Tax

  • ‘13.4million Nigerians in tax net’

    ‘13.4million Nigerians in tax net’

    State tax authorities have added 3, 414, 496 million new taxpayers to the national tax register under six months, bringing the total number of individual taxpayers in the country to 13.4 million, the Federal Inland Revenue Service (FIRS) said yesterday.

    Kano State led the new taxpayer roll with about one million taxpayers (944, 376). Lagos followed with 320,000 new taxpayers. Plateau State is third with 296,910, while Kaduna added 235,812 new tax paying men and women within the period.

    Zamfara State is fifth on the list of new taxpayers’ table with 136,773.

    Chairman Joint Tax Board (JTB), Tunde Fowler, who is also the Executive Chairman, FIRS, disclosed this at the Transcorp Hilton in Abuja during the 136th meeting of the board.

    Mr. Fowler noted that though the new 3.4 million roll of new taxpayers is cheering news, it is still a far cry of tax to Gross Domestic Product (GDP) ratio of 30 per cent which is the average in most developed countries.

    At the event,  the FIRS chairman; the Comptroller General of the Nigeria Customs Service (NCS), Hameed Ali (rtd); Corps Marshal of the Federal Road Safety Commission (FRSC), Boboye Oyeyemi; Comptroller-General of Nigeria Immigration Service (NIS) Mohammed Babandede, who was represented by N. E Graham, discussed how robust inter-agency cooperation could enhance tax compliance and optimise revenue collection.

    The Chief Executive Officers of the four agency heads, along with chairmen of the State Boards of Internal Revenue (SBIRs), also came up with fresh ideas on how real-time data sharing, automation of processes and operations by all SBIRs, revenue stakeholders, inter-operability of their databases, could enhance revenue generation and assist Nigeria to bake a bigger revenue cake.

    The target of the JTB is to increase the number of individual taxpayers to 20 million by December.

    The JTB chairman noted that about 10 states were already sharing Withholding Tax (WHT) and Value Added Tax (VAT) data with the FIRS under the VAT data automation project.

    This, he explained, was made possible by deployment of Information Communication Technology (ICT) equipment and installation of requisite software across the states.

    Soon, the JTB chairman promised, the Taxpayers Identification Number (TIN) cards would be upgraded to hold robust taxpayer data which all SBIRs, FIRS and authorised stakeholders could query for taxpayer data status.

    He announced too that the collaboration between FIRS and the SBIRs was yielding fruits as their teams now conduct joint audits, share information on unremitted taxes and taxpayer education in many states among others.

  • Tax incentives coming for manufacturers

    Tax incentives coming for manufacturers

    TAX incentives are on the way for manufacturers, the Federal Government said yesterday.

    It is to get the country out of recession next year, Minister of Finance Mrs Kemi Adeosun said.

    She traced the sector’s major problem to foreign exchange issues caused by the inconsistencies in the forex policies of the Central Bank of Nigeria (CBN).

    Speaking after the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja, she said: “forex is a major issue for the manufacturing sector. They will do better if there is consistency in forex policy. Manufacturing remains very critical to the growth of the economy and getting the country out of recession. However, manufacturing is challenged because of forex issues and we are going to roll out a lot of measures to support them, including tax incentives and investment in infrastructure.”

    The minister also admitted that settling domestic debts, as recommended by the CBN, was critical to getting the economy out of the quagmire. She said this administration inherited hidden debts as a result of transiting from the old accounting platform to a new one which exposed all the debts owed including Joint Venture Cash Calls.

    The government, she said is working in conjunction with the CBN to settle domestic debts, which are “affecting the ability to grow the economy”; “they have to be settled for the economy to move forward.”

    Speaking on the outcome of the FAAC meeting, the minister said the country suffered a revenue loss of about $51 million in export sales as result of the activities of militants in August.

    Be this development, N420 billion, same as last September was shared for October. Of this, N203.952 billion was shared as statutory allocation among the three tiers of government.

    After making deductions and paying revenue generating agencies, the Government got N96.674 billion, state governments got N49.035 billion, local governments N37.804 billion; N13.548 billion was shared as 13% derivation to oil producing states.

    From Value Added Tax (VAT), N69.621 billion was shared amongst the three tiers as well as N37.319 billion from exchange gain, N109.108 billion from excess Petroleum Profit Tax (PPT) bringing the grand total to N420 billion.

    Mrs. Adeosun said over 900,000 barrels of crude oil were shut-in. This affected the revenue for the month but the minister was optimistic that the situation would be addressed and the volume of crude production will improve with time.

     According to the minister, “we are beginning to see signs of improvement in revenue by reducing dependence on oil”.

     

  • Tax attack

    •Experts say sugar has no health value and WHO okays ‘tax attack’

    If you thought the world would be a bland, unsavoury place without sugar, well brace yourself for a sugar-free world someday. If you are already a sweet-tooth who relished sweetened sodas and sugar-crusted cakes and donuts, well be ready to pay through your nose for the world is up against sugar.

    Well, maybe not exactly the world but the World Health Organization (WHO) has just given a tacit nod to the campaign to impose heavy tax on soft drinks and other sugar products. Countries like Mexico and Poland have imposed taxes as high as 20 per cent on soft drinks, while South Africa will introduce sugar tax next year.

    WHO, which had frowned at the rate of consumption of sugar is of the opinion that raising taxes on ‘free sugars’ could drastically reduce their consumption. Free sugars are those not found naturally in fruits and milk.

    According to the global health body, people do not really need sugar intake as it nutritionally has no value. On the other hand, lower sugar intake would lower the incidences of diabetes, obesity and tooth decay.

    WHO is probably led to its current convictions by the rising prevalence of diabetes in the world over the past few decades. There are about 1.5 million cases of diabetes in Nigeria alone and 422 million adult cases worldwide by 2014 statistics.

    Diabetes is described as a chronic metabolic disease characterised by elevated levels of blood glucose which may over time lead to serious damage of the heart, blood vessels, eyes, kidney and nerves.

    Of all the ailments arising from the excessive intake of sugar, diabetes is the most dreaded because of the huge economic loss to the sufferers and their families as well as the health systems. According to WHO, the epidemic of diabetes has major health and economic impacts, especially in developing countries.

    We think that this tax and other lawful measures to curb excessive sugar intake and other harmful modern lifestyles are in order. Such foods, drinks and other substances ingested by modern man which have no salutary nutritional values but on the other hand, are harmful to the body need be moderated.

    Taxes on sugary foods and drinks are therefore a welcome policy that is indeed long overdue. We however urge that it requires a thorough and indeed studied process of public debate and broad consultations of all stakeholders.

    All the options must be thrown up and considered. For instance, all the issues between reduction in container size, the reduction of volume, quantity of sugar and appropriate taxes necessary; consumer rights and individual freedom of choice require a period of robust debate and public engagement.

    There are also the issue of regulation and monitoring by the appropriate agencies. The National Agency for Food and Drug Administration and Control (NAFDAC) must raise its game. It is common knowledge that many manufacturers are currently flouting the requisite regulations. A few years ago, NAFDAC in random checks on some manufacturers of consumer goods found that many products like soft drinks, toothpastes and bread produced in the country were actually not fit for human consumption.

    What this suggests is that if all the agencies did their work efficiently, there probably would be no need for this tax. The various ministries of health also would need to increase tempo on their enlightenment programmes to educate the populace on harmful modern lifestyles.

    In other words, we aver that tax is good but everyone must do a little more… it is about our lives after all.

  • TETFund wants firms to up 2% education tax

    Executive Secretary, Tertiary Education Trust Fund (TETFund), Dr. Abdullahi Baffa, has called for the expansion of two per cent education tax to more corporate companies.

    Baffa made the request at the seventh edition of the TETFund interactive forum jointly organised with the Federal Inland Revenue Services (FIRS) in Port Harcourt, River State.

    Baffa, in a statement in Abuja, called for the enforcement of tax payment compliance on companies to shore up TETFund revenue generation base.

    “One of the key things we want is enforced compliance. Those companies that are within the education tax net should pay correctly and those that are outside should be brought in,” the statement said.

    He said more institutions in Nigeria would soon be added to the list of top universities at the global level following the recent ranking of the University of Ibadan (801) among 1000 universities in the world.

    According to him, the improved ranking of UI by Times Higher Education World University Ranking was largely due to TETFund intervention projects.

    “It is very gratifying for the TETFund, as it is for every Nigeria, to hear that University of Ibadan is among the top 5 per cent universities in the world. This is one testimony that TETFund intervention is making the desired impact. Let me assure you and indeed, all other beneficiary institutions, that you would continue to enjoy the improved and determined support of TETFund at every step of your journey to the top of the league table.

    “To achieve this would require among other things, focused and targeted inflow of funding to our benefiting institutions through the Fund,” he said.

    The statement quoted the Executive Chairman, Federal Inland Revenue Service (FIRS), Babatunde Fowler, as blaming the fall in the collection of education tax revenue on tax evasions, the uncooperative attitude of private sector operators and unpatriotic business organisations.

     

  • Adeosun urges multinationals to pay tax

    Adeosun urges multinationals to pay tax

    Nigeria has urged G-24 member countries to compel multinational corporations to pay their fair share of taxes in places where they operate.

    The Minister of Finance, Mrs. Kemi Adeosun spoke with reporters in Washington D.C on the outcome of the closed door meeting of the G-24 Finance Ministers and Central Bank Governors on the sideline of the ongoing International Monetary Fund (IMF)/the World Bank Group General Meetings, yesterday. The G-24  represents the world’s most industrialised nations.

    Mrs. Adeosun lamented that the country loses huge amounts of money yearly through tax evasion perpetrated by multinational corporations. The appeal she said, has become imperative because Nigeria was determined to block revenue leakages and streamline its finances to develop infrastructure and create jobs.

    “We were able to make two contributions to members of the G-24. One of the contributions was the need for accelerated investment in infrastructure as the way out of our current situation which we believe will create jobs and reduce poverty. Another issue that we raised was tax evasion and the fact that we need the multilateral agencies to support us.

    “Trade is very important, but we need the multilateral nations to ensure that all multinational companies that trade in Nigeria pay their fair share of taxes and that point was well taken,”she said.

    She added that she was optimistic that before the end of the IMF/World Bank meetings, she would be able to tie up some of the pledges agreed on to specific projects in the housing and energy sectors.

    On the possibility of accessing IMF loans, Mrs. Adeosun restated Nigeria’s resolve not to rely on loans from the IMF, but rather to pursue budget support facilities from the World Bank and the African Development Bank (AfDB).

    Meanwhile, the Secretary-General, Organisation of Petroleum Exporting Countries (OPEC), Mr Mohammed Barkindo said he has briefed the country’s representatives on recent developments in the international oil market.

    He said OPEC came to brief the Commonwealth Ministers of Finance and Central Bank governors on the recent short time developments.

    “I briefed them on the outcome of the last OPEC meetings and the immediate prospects.Our last meeting was not only positive for Nigeria, but to the entire group. If you recall, Nigeria together with the Islamic Republic of Iran and Libya are being considered as countries undergoing special circumstances,” he said.

  • Raise revenue through tax, IMF urges Fed Govt

    Raise revenue through tax, IMF urges Fed Govt

    The International Monetary Fund (IMF) has advised the Federal Government to build up revenue mobilisation through tax capacity building for the country to get out of rcession and meet the Sustainable Development Goals (SDGs) of the United Nations.

    Its Director, Fiscal Affairs Department, Vitor Gaspar, who spoke at a press briefing on the IMF Fiscal Monitor report in Washington yesterday, said the debt rise in the country is characteristic of oil-producing economies.

    He said: “Message number one is that if you look at the global debt and deficit landscape, you’ll see that the countries that have the highest public sector deficit are oil exporters,” he said.

    “Nigeria is in debt group as a country that was very much hit by very low oil prices. That is a general message because it applies to oil exporters in general; the group of oil exporters have shared some characteristics.

    “The most important point in my view of general relevance is that for countries in sub-Saharan Africa to deliver on SDGs, for most of them, the key challenge is the building up of revenue mobilisation capacity through tax capacity building; that’s a key priority.

    “These countries must improve their capacities to raise revenue, and why is that so? Because there is such need in term of public infrastructure, there is such need in terms of public education, there is such need in terms of health.

    “For these groups of countries, public finance, fiscal policy is part of the overall development strategy, and in that, tax capacity is a fundamental cornerstone.

    The global lender warned that the economic situation in the country was creating economic difficulty for its neighbours, being a very important of economy in the West African sub-region.

    Its Head, Fiscal Policy and Surveillance Division, IMF Fiscal Affairs Department, Catherine Pattillo, said Nigeria’s challenges were hurting its neighbours.

    Pattillo said: “The slump in oil production and slow growth has created challenges for the country (Nigeria), but one statistic that is quite striking to me is that the debt profile is weakening and interest payment account for more than 45 per cent of Federal Government revenue.

    “On fiscal side, the important priority should be in safeguarding fiscal sustainability — which means, importantly, to increase non-oil revenues — and implementing an independent price-setting mechanism that minimises fuel subsidy.

    “So, these are two priorities, while also, of course, improving public service delivery so that citizens can see the benefits of good governance and services financed by the government.

    “As you know, Nigeria is a very important economy in the region and its success has positive spill over for the region, particularly in West Africa and its challenges then creates difficulties for its neighbours.”

  • My tax regime ‘ll be pocket-friendly, says Obaseki

    My tax regime ‘ll be pocket-friendly, says Obaseki

    The All Progressives Congress (APC) governorship candidate, Mr. Godwin Obaseki, has assured the people that his administration will introduce a tax regime that is pocket-friendly.

    He allayed fears of over-taxation, since, according to him, he was determined to run a people-oriented administration.

    In a press statement by the Godwin Obaseki Campaign Organisation (GOCO) in Benin City,  the state capital yesterday, the flag bearer said although it is important to enhance the internally generated revenue base, he vowed not to do so at the expense of the lean purse of the people.

    He said: “Bearing in mind our economic development initiatives, which we will commence immediately upon assuming office and recognising the role of taxation in development, we will implement a pocket-friendly regime to grow the tax base.”

    Obaseki said no one learns more about a problem than the person at the bottom, adding that, as a financial expert with international recognition, he was best suited to rule Edo State. He promised that genuine investors will also be encouraged.

    Obaseki added: “I have been a private sector businessman paying taxes to government and helping with taxation management, I know the pains of taxation and the benefits that comes with responsible management of tax proceeds.

    “Our government shall commit itself to a transparent management of tax payers’ resources at all times in line with the Adams Oshiomole’s administration that has emerged as one of the very few states in Nigeria that are not owing workers salaries”.

  • N5,000 tax enough to save a child from malaria, says FIRS chief Fowler

    N5,000 tax enough to save a child from malaria, says FIRS chief Fowler

    A tax of N5, 000 is enough to save the life of a child who has malaria from death, Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has said.

    Fowler recalled how the establishment of a connect between tax contribution of as little as N5, 000 and the life of a child, who may die from malaria, touched the hearts of some taxpayers who became compliant taxpayers in Lagos, when he held the forte as the chairman of the Lagos Internal Revenue Service (LIRS).

    In a statement, FIRS spokesman Wahab Gbadamosi said the FIRS chief made his observation in Accra at the Annual Tax Conference of the Chartered Institute of Taxation, Ghana (CITG), where Fowler was also given an award as a Honourary Fellow of the institute.

    Fowler noted that every kobo contributed by a taxpayer – even as little as N5, 000 – is enough to stop the death of a child from malaria.

    He told tax practitioners and administrators, from Ghana, Sierra Leone, Nigeria, Cote D’ivoire and other parts of the West African sub-region that beyond deploying the law, enforcement, technology and mobilisation, tax administrators must deploy a medley of psychology, persuasion and being firm to convince citizens to pay tax and to fund their country’s development.

    The statement quoted Fowler as saying: “When you ask people to pay tax, they ask you: ‘Why?’ But when you tell them that a tax of N5, 000 is enough to safe a child from dying from malaria, their attitude about tax begin to change gradually. As a tax administrator, you have to become a teacher to save the life of a child.

    “The point is that as tax administrators, we must see the work that we do, not just as another job, but as nation building. Tax collection is nation building. It is serving your nation. It is serving God.

    “When you convince a taxpayer that the tax he/she pays could save the life of a child who has malaria from death, you could begin to touch the taxpayer’s heart.

    “Before the law changes, tax administrators, need to wear the hat of a teacher, a psychologist, a friendly person and a firm upholder of the law.

    “All stakeholders must be conscious of our roles in ensuring that Africa catches up with the rest of the world in moving away from dependence on resource revenue towards dependence on taxation as the primary source of funding for our development.”

    The FIRS chief was said to have expressed concern that no member of the Organisation of Petroleum Exporting Countries, OPEC – with all their wealth – belongs to the league of developed countries.

    “Today”, he noted, “Venezuellans queue for food. It can be argued that the extent to which an economy is able to grow sustainably and develops depends to a large extent on its ability to generate tax revenue to finance its expenditure and the efficiency if its tax system.

    “Even in Nigeria, oil, gas and mining sector (6.48) is not the biggest contributor to the Gross Domestic Product (GDP) of $422.59 billion dollars. The sector takes the third place after Trade (19.15) and Agriculture (19.0).”

    Fowler, who stated that governments fund budget either by levying taxes or borrowing, noted that whatever tax collectors do must still be within the ambit of the law.

    He observed that “though tasking, it is still possible to collect taxes with existing laws”, describing  obsolete laws and challenging law amendment processes as some of the challenges to tax legislation in Africa.

     

     

  • TUC rejects proposed 9% telecoms tax

    TUC rejects proposed 9% telecoms tax

    The Trade Union Congress of Nigeria (TUC) has urged the Federal Government to drop its planned introduction of Communication Service Tax (CST). When passed into law, CST will automatically place a nine per cent tax charges on phone calls, Short Message Services (SMSs), Multi-Media Services (MMSs), data packages and other telecoms transactions.

    In a statement jointly signed by TUC President Comrade Bobboi Bala Kaigama, and the acting Secretary General Simeso Amachree, the union described the proposed tax as an exploitation of the already-impoverished masses.

    “We call on the Federal Government and the National Assembly to suspend the bill immediately because the masses are already overburdened with multiple taxation. It makes no sense for the country to initiate policies that would stifle businesses when it seeks to woo more investors.

    “If we sufficiently understand the minister, we wonder how he expects such tax to be paid by any worker in a country where the national minimum wage is N18, 000 and at a time when workers’ take-home pay no longer takes them home. Apart from exploiting the already impoverished masses, the policy would also discourage investment and lead to loss of jobs,” the union stated.

    The Minister of Communication, Mr. Adebayo Shittu, at a private sector dialogue session organised by the Lagos Chamber of Commerce and Industry (LCCI), in Lagos, last week, hinted that the planned tax, which has passed first reading at both chambers of the National Assembly, was conceived to help the Federal Government develop the ICT sector and implement its policies and plans in an integrated manner.

    He claimed that Nigeria would earn as much as N20 billion monthly if the bill is passed into law, adding that it would also help to cushion some of the country’s economic challenges and fund budget deficits in no small measure.

    But the union said: “While we appreciate the minister’s concern on how to fund the budget, should the government’s focus not rather be on ensuring more judicious use of revenue derived from Value Added Tax (VAT), Pay-As-You-Earn (PAYE), stamp duties, vehicle license, passport fees, customs duty, petroleum profit tax (PPT) and other taxes collected from the masses and companies?

    “And would it not be more appropriate for the desired additional taxes to be imposed on the GSM operators and other players in the communications industry rather than the poor masses?”

    Expressing concern over the issue, the group wondered why the common people should always be at the receiving end of government policies. “Most government officers rarely pay for anything, including their children’s school fees and utility bills. The cost is on us the masses,” Kaigama said.

    Kaigama stated that the country was in economic difficulty and needed to generate more revenue to deliver on government promises did not mean that obnoxious laws which adversely affect disposable incomes and gross domestic product (GDP) should be promulgated.

    He said stakeholders were not consulted before the meeting where the decision was taken, adding that various tiers of government that aimed to increase their revenues must do so by looking inward to the vast deposits of natural resources within their respective jurisdictions.

  • ‘Only 10m Nigerians pay tax’

    The National Tax Policy (NTP) Document Review Committee has said only 10 million out of 160 million population of Nigeria currently pay tax.

    This neglible number of tax payers, the committee lamented was depriving the country of huge revenue.

    Its Chairman, Prof. Abiola Sanni who spoke while addressing stakeholders at the maiden stakeholders engagement in Abuja yesterday called for the institutionalisation of tax matter by compelling political parties and politicians to mandatorily state their tax plans if elected.

    To achieve this, Prof Sanni advocated for an “institutionalised statutory regulation compelling political parties and elected public office seekers to categorically declare the tax measures to be adopted and strategies towards shoring up the nation’s revenues, especially Internally Generated Revenues (IGR).”

    Implementation of tax laws, he said requires political will at the highest level of government. He urged the Independent National Electoral Commission (INEC) to mandate political parties to articulate their fiscal policy in their manifestoes while the National Assembly should give tax matters priority attention.