Monday, April 19, 2021/10 a.m. / Ottoabasi Abasiekong for WebTV / Header Photo credits: WebTV
Digitization will go a long way in combating low tax penetration and increasing tax revenue while supporting Nigeria’s economic stability. The West African tax partner and head of Deloitte, Mr. Yomi Olugbenro, made this clear in a conversation about “Tax administration and economic development in Nigeria”.
According to him, Nigeria has come to a point where the digitization efforts of the tax administration are being reconsidered from the federal to the state level and the national identity management process is being used.
He praised the 2020 Finance Act, which made provisions for the use of technology to improve tax management, which should lead to innovations in the field of collection and aggregation.
Yomi Olugbenro strongly advocated linking the National Identity Number (NIN), National Identity Card and even Voter ID Card to Tax Identification Number (TIN).
With the technology, the tax expert believed that tax compliance could improve, while data intelligence would enable risk-based enforcement in the country’s tax arena.
In the recent report by the Civil Society Organization (CISLAC) that tax evasion cost Nigeria over $ 180 billion, he described it as a global phenomenon that has given rise to several international conventions and agreements.
He called for greater global cooperation between Nigeria and other nations in strengthening measures to reduce the effects of tax evasion. He stressed the need for clear identification of taxpayers in the country, which links taxpayers to their income and bank accounts to keep track of activity.
In addressing the threat of tax evasion, he acknowledged the importance of political will and noted that a transfer pricing review would be beneficial.
Looking at the prospect of expanding the tax network, Olugbenro agreed that much needs to be done in integrating the informal sector into the tax database, but stressed the need to deepen the penetration of the formal sector as well.
When he continued talking about the formal sector, he stressed that the focus should be on value added sectors that are not included in the tax base, which he admittedly has been difficult to do so far.
When assessing the incentives and amnesty measures to improve tax compliance, fight tax evasion and improve governance, he said the Voluntary Asset and Income Declaration System (VAIDS) was a laudable initiative, but it failed to achieve its goal.
He pointed out that Nigeria had failed to capitalize on the momentum of amnesty tax measures in the country, which should have changed the tax landscape.
Olugbenro also raised a fundamental problem that no punitive measures were taken against defaulters throughout the VAIDS period in order to deter others.
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