National Tax Conference sets the tone for improving government revenue

BY EMEKA EJERE

The October 2023 edition of the National Tax Conference was a gathering of fiscal policy experts and scholar, who assembled in Lagos to proffer solutions to the fundamental hurdles on the road to harnessing Nigeria’s huge tax potential.

It is no longer news that Nigeria ranks very low on the global case of paying taxes while the country’s tax-to-GDP ratio is one of the lowest in the world and well below the African average, at approximately 10.8 percent.

This has led to an overreliance on borrowing to finance public spending which in turn limits the fiscal space as debt service costs consume a greater portion of government revenue, annually resulting in a vicious cycle of inadequate funding for socio-economic development.

Themed “Nigeria Tax Reform: Challenges & Prospects”, the one-day National Tax Conference is part of the Corporate Social Responsibility (CSR) arm of Okwudili Ijezie & Co. (Chartered Accountants), under Blakey Ijezie Foundation (Education, Mentoring, Advocacy). The Foundation was flagged off by Dr. Mansur Muhtar, the then Minister of Finance, Federal Republic of Nigeria, on Saturday, April 11, 2009, at Ozubulu, Anambra State.

According to the organizers, the conference is one of the company’s interventions at a time the country is battling an impending debt distress, with a strive to grow the capacity of generating more revenue from within.

Recall that the major aim of the Fiscal Policy & Tax Reforms Committee constituted by President Bola Tinubu, and headed by Mr. Taiwo Oladel, is “to transform the nation’s tax system to support sustainable development and achieve a minimum of 18 percent tax-to-GDP ratio within the next 3 years without stifling investment or economic growth.”

According to President Bola Tinubu, “The consequences of the ongoing failure of our tax regime are real and significant. The inability of the government to efficiently raise revenue has led directly to an over reliance on borrowing to finance public spending.”

“A government that cannot properly fund itself will also lack the flexibility or fiscal scope to sensibly manage the economy or respond to external shocks.”

In his opening remarks, chairman of the conference, Mr. Kenneth Odusanya, FCA, Managing Partner, Kenneth Odusanya & Co. (Chartered Accountants), described fiscal policy as government’s strategic plan for running the economy in the short, medium and long term by prioritising spending, borrowing and taxation.

He noted that the reality is that as an economy moves through cycles of boom and recession and as different leaders and political parties move in and out of power fiscal priorities will change.

“Despite the number of changes Nigeria has made to its tax system in the past, there is still a very long way to go and the current situation of things is a big disincentive to doing business”, Odusanya cautioned.

“It is my opinion that taxes should be collected effectively and fairly, both in equitable and monetary terms, for our benefit, so as to ensure our desired growth and development. The greatest need of businesses in Nigeria today as a matter of priority is removal of tax disincentives hindering investments and business growth.”

The keynote speaker and chief host, Chief Blakey Ijezie, FCA, described the Presidential Committee on Fiscal Policy and Tax Reforms, as a reflection of President Tinubu’s commitment to bringing about transformative reforms in fiscal policy and taxation, noting that the move is hinged on the President’s promise to remove all barriers to business growth in Nigeria.

Ijezie, who is the Managing Partner, Okwudili Ijezie & Co. (Chartered Accountants), expressed confidence that Oyedele as the chairman of the committee will never fail.

“I see the setting up of the Taiwo Oyedele Fiscal Policy & Tax Reforms Committee as one of the best moves by President Bola Tinubu since he ascended the Aso Rock Villa on May 29, 2023 – to at least tackle the dwindling revenues accruable to the Federation Account.

“I am passionate about taxation, and I have volunteered my services, pro bono (free of charge), to assist in this direction, via this National Tax Conference. Let every other Nigerian play in his or her circle of competence, so that the future will be rosy for us all.”

The guest speakers included: Professor Friday Ndubuisi, pioneer & immediate past vice Chancellor, Christopher University, Mowe, Ogun State, Dr. Tunji Adeniyi, former Hon. Commissioner of Finance, Budget & Economic Planning, Ekiti State and Pastor Felix Jarikre, a Public Affairs Analyst.

In his submission, Prof Friday Ndubuisi, stressed the need for government to justify the taxes collected from taxpayers by providing the necessary public goods, saying a situation where the people are left to provide everything for themselves even after paying their taxes gives room for tax evasion.

“We were paying tax regularly while I was the vice-Chancellor of Christopher University, but at the end of the day we were providing water for ourselves, providing light for ourselves and providing security for ourselves. Is it supposed to be like that?”, he queried.

“It is not good for government to keep depending on borrowing for the provision of public goods, thereby piling loans upon loans. Government should generate revenue from within through taxation. But in doing that, there must be accountability”. Prof Ndubuisi spoke on the topic: ‘Taxation and Public service.’

Speaking on Tax, Value and Job Creation‘ , Dr. Tunji Adeniyi, stressed the need for government to create enabling environment for business to thrive, saying it is only when that is done that people bring in investments and jobs are created.

He admonished government at all levels to be more prudent in the use of taxpayers money, arguing the reckless spending by government officials fuels tax evasion.

“It is only when value is created that you have income, and it is only income you can tax. You cannot tax someone without a job. “If you expect tax revenue to go up, then volume of production should also go up“, Adeniyi said,

Adeniyi stressed the need for the placement of the right people in critical positions, “If you engage the wrong people in critical positions, it will be difficult to create value“, he said.

“Removal of petrol subsidy is also a way of creating value if the money saved by so doing is used for the good of the society“.

Also speaking on the topic, ‘Taxation and Corruption’, a public affairs analyst, Pator Felix Jarikre, identified accountability and transparency as key drivers of voluntary tax payment, stressing that lack of same kills tax morale.

He said, “Where public accountability and transparency are absent, large-scale corruption is inevitable. When the government is perceived to be very corrupt, the tax morale is drastically lowered. With less tax revenue, government revenue is negatively affected.

“Corruption can come in the forms of embezzlement, extortion, contract fraud, bribery, nepotism, cronyism, money laundering etc. Because it increases inequality, corruption is harmful to Nigeria’s political, economic and social development. No doubt, it also discourages foreign direct investment.

“With corruption affecting the growth potential of the economy, invariably the size of the projected tax-base is reduced. Experts have also noted that until Nigeria deals with tax fraud, fighting corruption would be a mirage.”

The robust discourse also enjoyed the inputs of other eggheads.

Otunba Ranti Omole, FCA, said, “The National Tax Conference should aim to come up with key tax issues and recommendations that can be forwarded to the Presidential Committee on Fiscal Policy & Tax Reforms, especially the industry perspective and options.”

Mr. Gbarayorks Nuira Albert, said, “Our Tax Administrators need to be checkmated. The fraud they perpetuate by issuing fake tax clearance certificates and aiding other sharp practices by tax evaders need to be curtailed.”

Dr. Agu Onwuzuruoha said,  “The Nigerian Tax System is mainly Indirect Taxes like VAT, Sales Tax and Tariffs. My worry is the very thin line between Taxation and extortion. How can we formalize them Revenue from touts? How can we formalize tge Informal Sector that contributes 45% of the GDP in Nigeria?”

Mr. Sunny Ikhioya said, “For you to have an effective tax system in place, you must create a conducive environment for businesses and job creation, you cannot tax people struggling to survive. For some of us, Institutional and structural defects in the system must be properly situated, especially the wastages and leakages.”

Mr. Aigbe Olotu, FCA said, “The Agberoo economies nationwide that politicians have deliberately maintained as parallel governments are tge easiest to mainstream. The amount generated by agberoos (aka NURTW) in most states that are unaccounted for can be as high as 20-30% of their annual budgets. Mainstreaming the urban transportation sector is not rocket science; it can be quickly executed.

“It must be stated that an effective tax collection and monitoring system is a critical success factor. Also important is strict consequence of IRS (Internal Revenue Service) staff, adequately compensated on a performance based incentive scheme.

“These are few low hanging opportunities for internally generated revenue to be significantly increased without increasing rates, if governments have the political will to act.”

The conference was attended by people from all walks of life, including representatives of Anambra State Government, among other groups.

Meanwhile, the next edition of the National Tax Conference has been slated for December 12, 2023, with the theme: ‘Tax Evasion in Nigeria – The Solution is Here’, at the Banquet Hall of Banex Mall, Lekki-Lagos.