CITN Seeks Policy Review to Increase Tax Revenue
The Chartered Institute of Taxation of Nigeria has said it is important to conduct a holistic review of the country’s international tax policies to have a framework that will increase tax revenue in the country.
This was part of discussions at the 25th annual tax conference of the institute in Abuja with the theme, ‘Nigeria of the future: Achieving sustainable development through taxation’.
During a panel session on, ‘Global trend in taxation of digital economy: Assessing economic, legal and tax policy implication’, notable financial chieftains made presentations on the topic during the conference.
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“Urgent attention to countermeasures of tax avoidance by multinational enterprises has become important, therefore, there is a need to conduct a holistic review of our international tax policies including multilateral and bilateral agreements with a view to having a strong legislative framework that will increase tax revenue in Nigeria,” the CITN noted.
It said the evolution of digital economy in recent years had created opportunities for tax authorities to develop regulatory frameworks for taxing numerous businesses and transactions.
The digital economy, it noted, had created new growth and employment opportunities and as a result, the number of gig workers providing labour service through platforms under one-off contract was increasing.
On the other hand, the CITN said, existing laws and institutional systems, particularly, tax and social security system, were not well adapted to this new situation, even though there was significant improvement in terms of awareness of taxing digital businesses.
Consequently, it added, there had arisen problems of tax gaps, which referred to tax revenue shortfall due to non-declaration or under declaration of taxable income, a tax burden inequality between self-employed and salaried works, and convenience problems related to tax declaration.
As a result of the disruption, it noted, commercial activities, and consumer location were frequently separated from associated profits and reported in different jurisdiction, resulting in base erosion and profiting shifting.
To address this issue, it noted, the OECD developed the BEPS Action Plan, which included measures aimed at addressing digitalisation’s tax challenges.
The Executive Director, Financial Accountability and Corporate Transparency Coalition, Ian Gary, US-based non-partisan alliance of more than 100 state, national, and international organisations, made a presentation on, ‘Global progress toward public, country-by-country reporting by MNEs’
