President Muhammadu Buhari on Tuesday in Abuja expressed his administration’s commitment to ensuring an efficient tax administration to improve tax revenue in the country.
The president said this when he declared open the second National Tax Dialogue Week, with the theme,” Tax Harmonisation for Enhanced Revenue Generation.”
He expressed concern about the current tax system in the country, which was characterised by fragmented administration, multiple and sometimes overlapping taxes.
He said: ”in most tax-efficient nations, tax administrative processes and practices are harmonised within a single system.
”One key deliverable of this year’s tax dialogue is to promote synergy in tax administration among the different tiers of government.
”Harmonising taxpayer identification across the country is a good start, but we must do more to promote ease of doing business (including ease of tax compliance) in Nigeria.
”On our part, we have started by clarifying in the 2021 Finance Act that FIRS is the sole authority to administer tax for the Federal Government.
”This clarification became necessary in order to avoid taxpayers being burdened with multiple tax compliance obligations toward different agencies of the same government.
”Multiplicity of tax administration is as undesirable as the multiplicity of taxes, it creates uncertainty and instability, and above all, it is inefficient,” the president said.
Buhari also stressed the need to maximise domestic revenue within the extant tax policy and laws in dwindling revenues from commodities.
He, therefore, proposed improved tax revenue for the country, which would not necessarily impose new tax rates on Nigerians.
”We all know that good intentions are not enough as they simply cannot pay for infrastructure, security or social amenities. We must, therefore, improve tax revenue without necessarily raising new taxes.
”Revenue from commodities, including crude oil, are too volatile and unreliable. Therefore, I pledge government’s support for any viable initiative for improving tax revenue that should emanate from this dialogue,’’ he said.
On Nigeria’s Tax-to-GDP ratio, the president declared that the country also needs to do more in securing a buoyant domestic revenue base of the country.
This according to him, will bequeath an enduring economic foundation, political stability and social harmony to the next generation.
”According to the Organisation of Economic Cooperation and Development (OECD) in its Revenue Statistics in Africa 2021, the average ratio of Tax-to-GDP of 30 selected African countries in 2019 was 16.6% while Nigeria recorded a mere 6.0%.
”It is obvious that much needs to be done in the area of tax revenue mobilisation.
”It is my expectation that the discussions at this 2022 National Tax Dialogue will be focused on what we must do to maximise legitimate revenue collection and massively improve the Tax-to-GDP ratio,” he said.
On the importance of the Tax Dialogue, Buhari said that the first edition in 2021 was very productive and integral in influencing tax policy, as well as legislative and administrative changes that were introduced in 2021.
The Tax Dialogue was instituted by the Ministry of Finance, Budget and National Planning, and the Federal Inland Revenue Service (FIRS).
According to the president, the most significant testament to the success of the first edition is the fact that the FIRS achieved 100% of its collection target in 2021 and surpassed the N6 trillion revenue threshold for the very first time.
While congratulating FIRS on the achievement, the president assured Nigerians that the present administration would continue ”to maintain prudent management of our collective resources.”