Mrs. Omoigui-Okauru made the disclosure at two different occasions where she presented papers The papers were delivered 123rd meeting of Joint Tax Board in Yola, Adamawa State and during the Annual Omolayole Management Lecture recently held in Lagos.
She said multiple taxations has resulted in different approaches to the same kind of tax matters among member states and in some cases which have become an embarrassment to the country.
“The phenomenon has not only become a major concern to all but has caused a lot of embarrassment to our country as international communities, agencies and investors have continued to draw our attention to the harmful effect and impact of multiple taxation,” she said.
In a communiqué issued at the end of the JTB meeting, the board condemned all incidences of multiple taxations and urged all tiers of government to take steps towards its eradication.
It reiterated the need for revenue authorities to as a matter of urgency modernize their system of tax administration.
It also re-emphasized the need to abide by the statutory provisions in tax laws in Nigeria and called on all tiers of government to abide strictly by their provisions, particularly the provisions of the taxes and levies.
Meanwhile at the programme in Lagos, the FIRS boss said the government has striven in the last decade to ensure that taxation plays a major role in achieving its developmental goals. This, she said prompted major reforms in the tax system spread across processes, people, systems and policy. These reforms have led to, among other positive developments in the tax system, growth in overall tax revenues from about N106 billion in 1996 to N2.9 trillion in 2008 and N2.2 trillion in 2009.
She said the recorded revenue shows vast potential, which taxation holds for stimulating growth within the economy. Adding that the government has paid more attention to tax issues since the return of democracy by recognising the importance of taxation in creating sustainable development, providing a sustainable source of income and participatory system of development, where all citizens share ownership of developmental efforts,” she hinted.
On Vision 20:2020, she pointed out that the programme was designed to merge the objectives of the National Economic Empowerment and Development Strategy (NEEDS) programme and the famous Seven-Point Agenda into a single framework. The vision is meant to stimulate Nigeria’s economic growth and launch the country into a path of sustained and rapid socio-economic development while placing it in the bracket of top 20 largest economies of the world by the year 2020. It is also expected to push the country’s Gross Domestic Product (GDP) to not less than $900 billion and a per capita income of not less than $4,000 per annum by the year 2020.
“Without a doubt the achievement of these goals, will put Nigeria on a firm path of economic growth and situate the country within the league of the more developed nations,” she said.
Achieving the vision, requires an understanding of what role each sector of the economy will play and that is where taxation comes in. Taxation can help the country have a shared ownership of the vision, inclusive development and an effective strategic plan, which is what, has been preached in the tax system in the last decade. “For me, I will summarise the critical contribution of taxation to be one, which encourages citizen participation and ownership of the process and programs aimed at implementing the Vision 2020, in the same way as was done and continues to be done in implementing ongoing tax reforms,” she said.
Mrs Omoigui-Okauru said the practice which propels taxpayers to comply with tax laws and promptly and properly pay their taxes, without coarcion will be a very useful attribute in getting the critical mass required for implementation of each step of the vision. When a taxpayer voluntarily steps out to pay his/her taxes in fulfilment of his legal obligations and as his contribution to national development, he is not only carrying out a physical act of compliance, but is also sending out a silent message that confirms his willingness to contribute to the development of the country.
This type of spirit should be encouraged and replicated within the relevant sectors of the economy. This can serve as the foundation of a silent revolution to create a disciplined, patriotic citizenry, which puts country first and is first willing to “do” for the country, before asking what the country can do for them. There can be no greater vehicle for the achievement of any vision than persons who are willing to voluntarily make the required sacrifice for the achievement of that vision irrespective of whether they stand alone or in concert with others, she said.
She said this type of commitment has been seen in various aspects of and at various times during the ongoing tax reforms. This gives me the conviction that the systemic reforms, which have taken place in the tax system in the last half decade or so, can serve as a platform for pushing through the reforms needed in other areas of our economic life towards achieving our set goals.
Prior to the tax reforms, the tax system was unable to live up to its potential because of the prevalence of manual, largely unresponsive tax system in place. There was also low taxpayer confidence, morale within the tax administration was also low, there were complaints of poor working conditions, low remuneration, no motivation, lack of adequate and appropriate working tools and consequently low tax yield. This was the situation in which the reforms commenced.
In less than a decade however, the FIRS boss said the body has been able due to turn around the tax system for good. “Today we have in place a largely automated tax system, where core tax processes such as registration and identification of taxpayers are now fully automated. We have put in place an electronic payment and reporting system for tax collection which has largely reduced leakages of tax revenue and created greater transparency and accountability in the tax system. This has led to greater taxpayer confidence and brought more taxpayers into the tax net thereby increasing tax revenue. We are now moving towards an Integrated Tax Administration System (ITAS), where all core tax processes will be fully automated,” she said.
The FIRS has also embarked on massive taxpayer enlightenment, which makes an average taxpayer to be better informed about the operations of the tax system. Tax officials have undergone massive re-orientation, retraining and re-education which have helped to improve the value system, and reduce the level of corruption in the system. Over dependence on oil taxes have begun to shift towards a more even spread of tax revenue between oil and non-oil taxes. A National Tax Policy has been approved by the government and will soon be formally launched.
She said the tax system is currently being held up as a model within Africa as demonstrated in its key officials being admitted as members of the United Nations Committee of Experts on International Co-operation in Tax Matters. Nigeria is also a founding member of the African Tax Administration Forum (ATAF) set up as an umbrella body for African Tax Administrations to foster co-operation and collaboration amongst African tax authorities. Nigeria is a Council member of ATAF and was pivotal in the creation of the body and the recent signing of the ATAF
Agreement and the Rules and Procedures.
Mrs Omoigui-Okauru said the international recognition is a testimony to the progress which has been made by the tax administration in Nigeria since the advent of democracy. It further attests to the fact that Nigeria would be given its proper place of recognition in the global economy as soon as we put things right internally.
She said the biggest role the tax system can play is to provide a precedent and guide for the attainment of the country’s overall developments goals.
