The Federal Government is owed a colossal sum of over N260 billion and over $260 million in Withholding Tax (WHT), Pay As You Earn (PAYE) and Value Added Tax (VAT) by companies, institutions, and ministries, departments and agencies ( MDA s), the Finance Minister of State, Mr. Remi Babalola revealed during the annual tax conference of the Chartered Institute of Taxation of Nigeria ( CITN ), where he described the debt as unacceptable to the government and must be recovered.
“The government has observed the disturbing trend of delay in the remittance of revenue collected by some banks to the appropriate authorities. There is also alarming volume of tax debts owned by companies, institutions and MDAs to government, raising question of whether the current penalty for defaulters is adequate,” he said.
He disclosed that the government would soon review the penalty for defaulters in WHT, PAYE and VAT.
On the issue of inefficiencies, corruption, leakages and all other imperfections in the tax system, Babalola stated that the Federal Government had put in place appropriate measures to eliminate them and enhance the revenue of the government.
“Additionally, steps are being taken to make revenue generating MDAs to accurately disclose earnings, payments and remittances to the Federation Account. Indeed, the process of commissioning a process audit of all revenue-generating agencies has commenced.
“Besides, as a measure of improving the nation’s investment climate, the government has rolled back excise duties on selected products as part of efforts to encourage the manufacturing sector. More importantly, the government is determined to ensure that taxes are certain, fair, easy to understand, straight forward to pay and economical to collect,” he explained.
He noted that the current Administration was determined to make a difference in terms of revenue generation and management of the nation’s resources through effective tax administration policies and reforms.
The Federal Government, according to him, is aware of the need to enhance revenue through broadening and deepening the tax base, effective surveillance efforts and aggressive monitoring by the relevant government agencies.
In this regard, he noted that efforts were on to reform the current tax system in order to enhance revenue. He added, “The proposed tax reform is aimed at addressing multiple taxations and the need to strike a balance between governments’ lawful need for revenue and the desire to encourage investors. Over the years, there have been several policies aimed at tax compliance by individuals as well as corporate organizations.
“The bottom-line of such policies is the desire by all tiers of government to derive high revenue from tax. Our charge is to be proactive and look beyond the challenges of the moment to reposition the economy to effectively meet its present and future growth needs, which all Nigerians will be proud of.”