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Economy | Taxes & Tariffs

Digitization will Help to Address Low Tax Penetration in Nigeria

Apr 19, 2021   •   by   •   Source: Proshare   •   eye-icon 892 views

Monday,April 19, 2021 / 10:00AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV


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Digitization will go a long way in addressing low tax penetration andincrease fiscal revenues while supporting economic stability in Nigeria. TheWest Africa Tax Partner and Lead, Deloitte, Mr. Yomi Olugbenro, made this pointin a conversation on "Tax Administration and Economic Development in Nigeria".

 

According to him, Nigeria has come to a point of rethinking digitizationefforts of tax administration from the federal to the state level, leveragingthe national identity management process.

 

He lauded the Finance ACT 2020 which has made provisions for thedeployment of technology in improving tax administration, which should engenderinnovation in the collection and aggregation segment.

 

Yomi Olugbenro made a strong case for the linking of the NationalIdentity Number (NIN), National ID Card, and even the voter's card linking tothe tax identification number (TIN).

 

With technology, the tax expert believed tax compliance could improvewhile data intelligence would enable risk-based enforcement in the fiscal spacein the country.

 

In the recent report of the Civil Society Organization (CISLAC) that taxevasion cost Nigeria over $180bn, he described it as a global phenomenon thathas led to several international conventions and agreements.

 

He called for more global cooperation between Nigeria and other nationsin strengthening measures to reduce the impact of tax evasion. He stressed theneed for the unique identification of taxpayers in the country hence linkingtaxpayers to their incomes and bank accounts to track activities.

 

In tackling the menace of tax evasion he acknowledged that politicalwill was important, he also noted that a review of transfer pricing regulationswould be beneficial.

 

Looking at the prospects of widening the tax net, Olugbenro agreed thata lot has to be done in integrating the informal sector into the tax database,but emphasized the need to deepen penetration in the formal sector as well.

 

Speaking further on the formal sector he stressed that the focus shouldbe on value-adding sectors not captured in the tax base, which he admitted hasso far been difficult.

 

Assessing the incentives and amnesty measures that were designed toimprove tax compliance, address evasion and improve the administration he saidthe Voluntary Assets and Income Declaration Scheme (VAIDS) was a laudableinitiative but did not achieve its objective.

 

He decried the fact that Nigeria did not leverage on the momentum of amnestytax measures in the country, which should have transformed the tax landscape.

 

Olugbenro also raised a fundamental issue that throughout the VAIDSphase there were no punitive measures meted out to defaulters, which shouldhave served as a deterrent to others.


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 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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