April 19, 2021 / 10:00AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
Digitization will go a long way in addressing low tax penetration and increase fiscal revenues while supporting economic stability in Nigeria. The West Africa Tax Partner and Lead, Deloitte, Mr. Yomi Olugbenro, made this point in a conversation on "Tax Administration and Economic Development in Nigeria".
According to him, Nigeria has come to a point of rethinking digitization efforts of tax administration from the federal to the state level, leveraging the national identity management process.
He lauded the Finance ACT 2020 which has made provisions for the deployment of technology in improving tax administration, which should engender innovation in the collection and aggregation segment.
Yomi Olugbenro made a strong case for the linking of the National Identity Number (NIN), National ID Card, and even the voter's card linking to the tax identification number (TIN).
With technology, the tax expert believed tax compliance could improve while data intelligence would enable risk-based enforcement in the fiscal space in the country.
In the recent report of the Civil Society Organization (CISLAC) that tax evasion cost Nigeria over $180bn, he described it as a global phenomenon that has led to several international conventions and agreements.
He called for more global cooperation between Nigeria and other nations in strengthening measures to reduce the impact of tax evasion. He stressed the need for the unique identification of taxpayers in the country hence linking taxpayers to their incomes and bank accounts to track activities.
In tackling the menace of tax evasion he acknowledged that political will was important, he also noted that a review of transfer pricing regulations would be beneficial.
Looking at the prospects of widening the tax net, Olugbenro agreed that a 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 should be on value-adding sectors not captured in the tax base, which he admitted has so far been difficult.
Assessing the incentives and amnesty measures that were designed to improve tax compliance, address evasion and improve the administration he said the Voluntary Assets and Income Declaration Scheme (VAIDS) was a laudable initiative but did not achieve its objective.
He decried the fact that Nigeria did not leverage on the momentum of amnesty tax measures in the country, which should have transformed the tax landscape.
Olugbenro also raised a fundamental issue that throughout the VAIDS phase there were no punitive measures meted out to defaulters, which should have served as a deterrent to others.