The President/CEO of MFP Global Services and board member of Oyo State Anti-Corruption Agency, Dr. Prince Oyebade Oyedepo, FCA says the new tax laws recently passed can translate to economic growth and development if properly implemented by the tax administrators of local, states and federal governments.
The MFP boss made this comment when he featured on success FM radio program tagged, THE PLATFORM anchored by Mr. Akeem Kareem recently.
According to him, taxation is a compulsory levy, payable to the government for its running. In other words, it is compulsory; you have to pay it whether convenient or not. Taxation has been there for years immemorial. However, the review has been long overdue. We have a lot of tax laws in the past. You may not even be able to count them as they are numerous. There were ambiguities and complexities therein. Those ambiguities and complexities were paving the way for multiple taxation. So, all these shortcomings necessitated the review of our tax laws. The review carried out has made them compact and few in such a way that an average Nigerian can read and understand.
The four tax laws have treated almost all the taxation we have in the country, and comprehensively. It has removed a lot of ambiguities as well. It has simplified the tax laws in such a way that it can easily be understood, even by laymen.
The anti-corruption Czar mentioned that the issue of multiple taxation has been addressed by the tax laws as it has defined in clear terms the tier of government responsible for the collection of taxes, it has defined tax jurisdiction, it has made provision for joint implementation of the laws by the three tiers of government and has created the office of tax ombudsman to arbitrate in case of dispute. The office of the ombudsman has not been there in the past. This office is in addition to the tax appeal tribunals existing before now.
Dr. Prince Oyebade Oyedepo opines that the new tax laws are progressive in nature as it targets the rich more than the poor. By so doing, the rich will be made to pay more than the poor to take care of the needs of everybody.
The laws have exempted those within the threshold of eight hundred thousand naira only per annum from paying of taxes. It has exempted small enterprises within a threshold of one hundred million naira also from payment of taxes. This is a big relief for enterprises in that category to grow to become big within a short period of time. Those enterprises in that category, can plow back, the taxes they used to pay in the past to upscale.
The MFP top brass eulogized the government for making Nigeria Revenue Service the sole agency to collect all taxes and levies due to the federal government.
According to him, it will eliminate corruption, wastages in the system and promote efficiency. In his words, it will curb abuses and corruption in the system, it will reduce wastages as the number of personnel and expenses will reduce drastically. The money saved can be used to fix infrastructures and meet other needs.
He applauded the government for retaining VAT at 7.5% and expanding the exempted items particularly on medicines, foods, health care services etc. This will help to reduce the cost of production and consequently the prices at which the products will be sold thus reducing inflation.
He allayed the fear in some quarters that the state governments may lose the internally generated revenue by the time the tax laws are in force. According to him, more people will be brought to the tax net with the synergy in place amongst the agencies of government.
In addition, the more money payable by the rich will compensate for the loss of taxes from the poor already exempted.
Dr. Prince Oyebade Oyedepo mentioned that too much time were hitherto deployed in getting those meager resources from the poor in the past. If the time is spent in going about those with huge income, the revenue therefrom will be more than double of what they used to collect in the past.
The MFP boss mentioned reasons why some people are not in the tax net of government. One of the reasons is, the deliberate attempt on the part of people not to pay taxes. People should willingly volunteer to pay taxes but that is not so in our clime. They consider payment of taxes burdensome rather than obligation. Secondly, they are reluctant because government has not been accountable. Thirdly, the tax awareness has not been intense.
Fourthly, the tax officials appear overwhelmed not to have been able to bring in people outside the tax net. Fifthly, lack of agency collaboration is another factor responsible. Sixthly, some people are not aware of the advantages or benefits accruing to them after paying taxes.
He mentioned that the new tax laws have addressed some of the tax gaps. According to him, the revenue has embraced digitalization to ease assessment, collection, monitoring, accountability and enforcement. He used the opportunity to advise the government to be patronizing our local software developers to develop tailored software for the use of various agencies rather than buying the foreign software which may not even serve our peculiar situation.
Dr. Oyebade Oyedepo shed light on the difference between loan received into account and the real income. According to him, loans are not taxable. Only income earned are taxable. He encouraged individuals and enterprises to seek knowledge to avoid being taxed wrongly.
The anti-corruption Czar criticized the government on the tax to GDP ratio claimed to be the lowest in Africa. He argued that the basis of determining the tax to GDP ratio was faulty and consequently the outcome.
The process of ascertaining the GDP cannot be right in a Country where substantial resources or incomes are outside the banking industry. He advised them to use better and more reliable basis to determine the ratio than wrong data.
He counselled the government to embrace the following strategies to shore up the tax revenue in the course of implementing the new tax laws to propel economic growth and development;
• Enlighten people to embrace tax payment through persuasion to gain their confidence
• Those in government should be accountable
• Corruption should be fought and reduced to the barest minimum
• Government should fix infrastructures to help businesses thrive
• Diversification should be embraced in such a way that taxes will come from different sectors of the economy
• Interest rate should be crashed to encourage people to invest in the economy. Grant deserving people loan to go into businesses
• Insecurity should be fixed as urgently as possible
• Sanctions for corrupt practices should be ensured by strengthening the judiciary
• Monitor the implementation of the tax laws to ensure multiple taxes are eliminated completely.
He urged the citizens to support the government for the betterment of all.
Dr Prince Oyebade Oyedepo, FCA is a Past Chairman of Ibadan & District Society of ICAN & CITN, Patron of Ibadan & District Society of ICAN, Past Zonal Chairman of ICAN & Former Member of ICAN National Governing Council. He is a Former Vice Chairman of Association of Nigerian Authors, Oyo State Chapter. He is presently serving Oyo State Government as a Board Member of Oyo State Anti-Corruption Agency (OYACA). He is an Author and a Public Affairs Analyst. He is the President/CEO of MFP Global Services and Leader of MFP Group, a Group of Multidisciplinary Finance Professionals