Nigerians will be more willing to pay tax when government officials stop stealing and mismanaging public funds the President, Chartered Institute of Taxation of Nigeria, Dr Ikemefuna Edeh, said on Tuesday.
Edeh spoke at a workshop organised by the Federal Ministry of Finance to train professionals in the Voluntary Assets and Income Declaration Scheme in Enugu.
Giving reasons for the low tax compliance level in the country, Edeh observed that the stealing and mismanagement of public funds by government officials discouraged Nigerians from paying tax.
He noted that Nigerians, who lacked basic amenities, were unwilling to pay tax because they did not believe the government would enhance their welfare.
Edeh further observed that the ostentatious lifestyle of prominent politicians, whose wealth was generally believed to have been acquired through stolen public funds, was a major disincentive to tax payment.
He said, “People are not seeing the effect of paying tax; therefore, they are reluctant to pay tax.
“They see politicians having all the money everywhere, the money that came from the government; so, they don’t feel encouraged to pay tax.”
The CITN President declared that good governance would result in improved tax compliance among Nigerians.
“When the government decides to do the right thing, payment of tax will improve. The Government should make sure the tax collected from Nigerians is put to good use. If the people see that taxes are put to appropriate use, they will be happy and that will encourage them to always pay,” Edeh added.
He also cited the ‘oil boom’, which followed the discovery of crude oil in the country as another reason for the low tax compliance level in the country.
He noted that the Federal Government lost interest in tax collection due to the oil revenue, saying, “During the colonial era, tax was collected in all nooks and crannies of the country but when the oil money came, the government lost interest in collecting taxes.”
Edeh stressed that the CITN was committed to collaborating with the government to improve the payment of tax in the country.
“For us as an institute, we intend to complement government’s efforts at ramping up tax collection and boosting a tax-paying culture among the population.”
The Executive Chairman of the Federal Inland Revenue Service, Mr. Tunde Fowler, represented by Mr. Gbolga Oshiga, had earlier disclosed that the tax to GDP ratio in Nigeria was six per cent, one of the lowest in the world.
He said, “The tax compliance level in the country is one of the lowest in the world; at the moment, the tax compliance level to GDP is six per cent.”
Oshiga expressed the hope that the Voluntary Assets and Income Declaration Scheme would improve tax compliance in the country.
VAIDS, which commenced in July 2017, is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods.
In exchange for ‘fully and honestly’ declaring previously undisclosed assets and incomes, taxpayers will benefit from the forgiveness of overdue interests and penalties and the assurance that they will not face criminal prosecution for tax offences or be investigated.
The scheme will elapse in March, 2018, after which defaulters would be liable to face full penalties for non compliance.
Oshiga urged Nigerians to take advantage of VAIDS to declare their income and assets.
Have you taken advantage of VAIDS to regularize your tax status?
Source: The Punch