FEDERAL government yesterday indicated
its resolve to ensure the nation’s tax system
reflects the commercial activity levels in the
country.
In order to achieve this, it stressed its
commitment to the process of mobilising
revenue from the non-oil sector.
In a keynote address at the opening
ceremony of the 18th annual tax conference of
the Chartered Institute of Taxation of Nigeria,
CITN, in Abuja, the Minister of Finance, Mrs.
Kemi Adeosun, who represented President
Muhammadu Buhari, stressed the need for
a robust tax system, which he described
as a pre-requisite for any economy that is
serious in its commitment to growth and
development.
The Minister said, “I carefully read the
communiqué arising from the tax conference
held last year and I acknowledge the
remarkable insight of the diagnosis that
‘Nigeria is experiencing growth without
development.
“I think that the CITN set out clearly the fiscal priorities needed to underpin our
economic agenda in a concise manner. Tax
collection must grow in line with growth in the
economy but this has not been the recent case in
Nigeria and that is our challenge.”
Stressing the resolve of the current
administration to mobilise revenue from
the non-oil sector, Mrs. Adeosun stated the
prevailing tax system must reflect the nature
of the nation’s commercial activity levels. She
noted that oil is just 13 per cent of our GDP
but it represents a disproportionate share of
our tax revenue, promising that Government
will develop a framework that will mobilise
revenue from the non-oil sector.
The Minister explained that the nation’s tax
system must be dynamic in order to respond
to an ever-evolving commercial landscape and
to increasingly technology-driven business
models.
She stated that the Federal Government, as
part of the drive to increase non-oil revenue,
has set an aggressive target for increasing tax
collection. This, according to her, is a reflection
of the fact that the current level of compliance is low and in some cases, the effective
tax rate paid by those that are compliant
is lower than expected. She added that
the commendable administrative efforts
of FIRS would be complemented by an
overhaul of the tax code and tax laws.
She disclosed that the Federal
Government plans to engage with relevant
members of the National Assembly
to ensure that required revisions,
amendments and new laws can be passed
expediently to keep pace with the rapid
change in business practices. The Minister
admitted “An overhaul of our tax code is
long overdue as is the redrafting of our tax
laws to reflect current business practices
and new trends. We must respond to the
growing phenomenon of base shifting and
other practices that allow companies to
evade their fiscal and legal responsibilities.”
She further stated that “We will critically
examine our GDP to align taxes with
economic activity in our bid to block all leakages. For example, the multibillion
naira losses being identified
in our solid minerals sector by
illegal and undocumented miners
will be addressed with increased
formalisation and review of the
governing laws. Indeed, we are
committed to the continuous
improvement of our tax system as
part of a dynamic framework.”
According to her, some of the
recent initiatives being implemented
in the Ministry of Finance mean
that it is now virtually impossible to
obtain a payment from the Federal
Government without being fully
taxed compliant. Promising that tax revenues
will be judiciously utilised going
further, the Mrs. Adeosun stated
that tax payment is part of the social
contract between Government and
people and that the most effective
measure to enhance compliance is
the knowledge that tax revenues
are being utilised effectively for the
development of the people.
The Minister explained that the
Federal Government is already
implementing public financial
management reforms to strengthen
financial controls and ensure greater
accountability, while the government
is also making progress to ensure
value for money in every naira spent in its efforts to reduce overhead
and increase the efficiency of
government expenditure.
She expressed the commitment
of the current administration to
address the current infrastructure
deficit, which is critical to enable
economic development. She
stated that the 2016 Budget marks
a strategic shift given the fact
that the Federal Government is
determined to direct 30 per cent
of expenditure towards capital
investment, explaining that the
mobilisation of government
revenue, including tax revenues,
is therefore paramount to meet the
significant investment required.


Ad:See How you can turn $500 into $10,000 Click HERE For Details.
SHARE