FG Tax reform to install fiscal discipline, remove impediments in tax system, eliminate ambiguity in tax laws

• Stakeholders canvass for tax waiver, tax holiday to boost manufacturing sector

 

The federal government through the Federal Inland Revenue Service (FIRS) has announced that over the years, Nigeria has recognized the need for tax policy reforms to address the challenges faced by businesses and create an enabling environment for economic growth; hence part of the Renewed Hope Agenda of President Bola Ahmed Tinubu is to reform the tax system.

 The Executive Chairman, FIRS, Zacch Adedeji, stated this at the Commerce and Industry Correspondents Association of Nigeria (CICAN) annual workshop awards and recognition themed “Effects of the federal government’s tax reforms on the economy” held in Lagos.

Adedeji who was represented by the Director and Coordinator, Lagos Island FIRS, Mrs. Oyeniyi Fadekemi, stated that on assumption of office, he set up a Presidential Committee on Fiscal Policy and Tax Reforms headed by Mr Taiwo Oyedele with other eminent Nigerians representing various institutions and professional bodies with the mandate to reform the tax ecosystem.

This reform, he said, is expected to lead to fiscal discipline, remove all impediments in our tax system, and eliminate the ambiguity in our tax laws that will culminate in the ease of doing business which will ultimately lead to improved revenue generated from taxes.

“Another critical aspect of our tax policy reforms is the promotion of voluntary compliance. Rather than resorting to punitive measures, we believe in fostering a culture of voluntary tax compliance

through educational campaigns, awareness programmes, and taxpayer support services. By engaging with taxpayers and providing them with the necessary tools and information, a high level of compliance rate is expected to happen. This will in turn help in building trust between the government and the business community,” the FIRS boss said.

He affirmed that the Oyedele-led Committee made a number of recommendations that will help businesses in the report it presented to the President recently.

“Some of these recommendations include the suspension of VAT on diesel and tax waiver on compressed natural gas conversion and renewable energy items; simplifying withholding tax to ease pressure on the working capital of businesses; suspension of multiple taxes that constitute a burden on poor and small businesses; waiver of penalty and interests upon full payment of outstanding tax liabilities on or before December 31, 2023. When implemented, these suggestions will go a long way in helping businesses within the country.

“The Executive Chairman has reiterated the desire of the Federal Government to raise tax to GDP ratio to 18% in the next three years without having to impose additional taxes. What the EC has said repeatedly is that this will be achieved through the use of tax laws to boost compliance. I am sure this assurance by the EC has allayed fears being expressed by business entities that the policy may engender the imposition of additional or new taxes.

“Lastly, we are committed to creating a level playing field for all taxpayers. The Executive Chairman recognizes the importance of combating tax evasion and ensuring that everyone pays their fair share of taxes. Through improved tax enforcement mechanisms, the Federal Inland Revenue Service aims to detect tax evaders, recover lost revenue, and prevent tax leakages. This not only enhances the integrity of our tax system but also ensures that compliant taxpayers are not disadvantaged by those who evade their tax obligations,” he added.

He explained that the tax policy reforms being implemented by the Federal Inland Revenue Service under the leadership of the Executive Chairman are vital for Nigeria’s business environment.

These reforms, he said, will enhance revenue generation, attract investment, promote economic growth, and ultimately improve the quality of life for all Nigerians.

However, he argued that the success of these reforms relies not only on the government but also on the active participation and cooperation of the business community and called upon all stakeholders to embrace these reforms, fulfill their tax obligations, and work hand in hand with the government in achieving our common goal of building a strong and resilient economy.

He expressed his gratitude to the Commerce and Industry Correspondents Association of Nigeria for organizing this conference and providing a platform to discuss such critical issues, adding “Together, let us strive for a vibrant and prosperous Nigeria, where businesses thrive, and our citizens can fulfill their potential.”

Also speaking, the Director General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, who was represented by Mr Patrick Chidi Eronobi said MAN’s vision to be the key driver for industrialization, sustainable economic growth and development in Nigeria has been the thrust of the services it offers to manufacturers in Nigeria.

He called for attitudinal change among the stakeholders because the policy is there, but implementation is the main issue.

According to him, we have basic ideas in our archives from conferences and workshops, but they are not being implemented as we continue to have policy somersaults.

He added that MAN is confident that the outcome of the conference will deliver positive issues and practical steps that will be transmitted to the Presidential Committee on Fiscal Policy & Tax reforms to further enhance their decisions to the benefit of the growth and development of the manufacturing sector as well as the Nigerian Economy.

The Chairman, Spectra Industries Limited, Chief Duro Kuteyi, pointed out that many Small and Medium Enterprises (SMEs) are closing shops due to the harsh operating environment, poor power supply, inaccessibility of raw materials, farmer-herder clashes as well as insecurity which are the bane of operations of many SMEs in the country.

Kuteyi harped on the need for the present administration to stimulate the growth of SMEs with tax forgiveness and tax waivers for SMEs to thrive.

On his part, the Chief Executive Officer, WVL Developers Limited and former Acting Managing Director, Bank of Industry, Waheed Olagunju, stated that with technology in place the nation would achieve rapid industrial growth.

The Managing Director /CEO FAE Ltd, Princess Bakere Okeowo stated that politicians are the problem because they are power drunk and a lot of bureaucracy in the system.

Okeowo queried why the government are always travelling with career politicians to conferences abroad instead of going with SMEs who will go there and learn and come back to invest what they learnt,

She lamented that we don’t have functional mill in Nigeria, whereas we have raw material for paper in Nigeria with gestation period of 12 months, adding that Nigeria can export papers.

NIDO President, Uwem -Edimo Samson explained that fiscal expenditure will negate any tax reform, especially with the politicians that have a lot of aides and urged government to look at how to help SMEs with tax waivers.

Uwem -Edimo queried how a country could be industrialized without electricity, stressing that we have what we need to get electricity, but we are flaring our gas.

The Chief Executive Officer, Centre for Promotion of Private Enterprise (CPPE), Muda Yusuf, in his goodwill message, said Nigeria is at a point of making sacrifices, adding that “we should not in the name of reform to be taking resources from the hands of the people to the hand of the politicians. The outcome of the reform should benefit the people. The issue of saving has to trickle down so that the people can feel it”.

Earlier in his welcome address, the CICAN National Chairman, Charles Okonji, said since the pronouncement of the fuel subsidy removal, many manufacturing outfits have closed shop.

Okonji said tax policies are critical for Nigeria’s growth and development and urged the federal government to immediately rejig its tax policies to attract potential investors and investors that have relocated outside the shores of the country due to the harsh business terrain to come back to the country.

High point of the event is the presentation of awards from CICAN to their recipients.