Experts Renew Call for Review of Nigeria’s Tax Laws, Processes
Tax practitioners have renewed call for a review of the nation’s tax laws and entire processes, saying it is the only way to drive increased revenue and Gross Domestic Product (GDP). Given Nigeria’s declining revenue base, the experts, who gathered at the maiden edition of GTL Trustees Limited ‘Annual Thought Leadership Roundtable Series’ held in Lagos, at the weekend, stressed the need for Government to create a robust framework for taxing the informal sector and high net worth individuals.
They noted that failure to tackle the myriads of problems besetting tax administration amid global outlook of low oil price would continue to limit the Nation’s revenue base, and create some level of inequity in the system. PricewaterhouseCoopers (PwC), a leading professional services firm, recently put Nigeria’s tax-to-GDP contribution at an abysmal six per cent, adding that this is far less impressive compared with what obtains in other countries using the same socio-economic parameters where tax-to-GDP could be as high as 15 to 25 per cent.
“While Ghana and Egypt tax contributes 16 per cent, Morocco, and South Africa tax to GDP ratio is put at 22 and 27 per cent.” Therefore, the experts suggested that tax reforms should be carried out urgently to effect relevant and necessary changes in the tax system and address both contentious and contemporary issues.
Specifically, a Partner and West Africa Tax Leader, Deloitte Nigeria, Yomi Olugbenro, regretted that some aspects of the Nation’s tax system is posing a threat to investment inflow, noting that Government must adopt an approach that would help provide a workable tax system and boost the revenue earning capacity.
According to him, rather than compelling a larger percentage to be more tax compliant, Government should deal with the issue of trust deficit. Trust deficit arises when citizens believe that Government will act in their best interest, and then it becomes harder for Government to secure public support for reforms. He added that taxes paid by the citizenry are meant to support Government to provide social services and development projects hence when that contract was not being fulfilled, the Government find it difficult to secure citizen’s support
The Managing Director, Oasis Group Limited, Adewale Adegbite, urged Government at all levels to accelerate technology adoption in tax administration to boost compliance and improve efficiency. He noted that leveraging technology for full electronic customer service would not only enhance efficiency, but also reposition the sector for the crucial journey of transforming the entire Nation’s tax system.
A Commercial Law expert and Professor of Tax and Fiscal Matters, University of Lagos, Abiola Sanni, argued that the recent economic recession had turned taxation to a ‘beautiful bride’ with far reaching implications for taxpayers. He noted that all the existing and future taxes are expected to align with equity, fairness, and simplicity with low cost compliance cost.
He listed non regular review of tax legislation, lack of strict adherence to tax policy direction and procedural guidelines for the operations of various tax authorities as major pitfalls, and urged Government to exploit tax opportunities and grow the economy.
STOCK MARKET REPORT FOR 3RD OF AUGUST, 2018
A total turnover of 1.391 billion shares worth N20.316 Billion in 20,064 deals were traded this week by investors on the floor of the Exchange in contrast to a total of 1.417 billion shares valued at N16.739 Billion that exchanged hands last week in 19,832 deals.
The Financial Services Industry (measured by volume) led the activity chart with 824.153 Million shares valued at N9.274 Billion traded in 11,620 deals; thus contributing 59.23% and 45.65% to the total equity turnover volume and value respectively. The Services Industry followed with 308.871 million shares worth N1.256 Billion in 610 deals. The third place was occupied by Consumer Goods Industry with a turnover of 86.151 million shares worth N86.151 Billion in 3,103 deals.
Trading in the Top Three Equities namely – Nigerian Aviation Handling Co. Plc, United Bank for Africa Plc and Zenith International Bank Plc (measured by volume) accounted for 460.997 million shares worth N5.273 Billion in 2,513 deals, contributing 33.13% and 25.95% to the total equity turnover volume and value respectively.