From Uche Usim, Abuja
As companies and other corporate institutions groan over a toxic operating environment, the acting chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, has ruled out a possible tax hike as the government was determined to improve the system, not impair it.
Adedeji’s assurances follow fears that FIRS’ plans to jack up the country’s tax-to-GDP ratio to 18 per cent from 10.86 will lead to an increase in taxes; which in turn will force many companies out of business.
But the acting FIRS boss, in a statement signed by Dare Adekanmbi, his Special Adviser on Media and Communication, noted that eyeing a higher tax-to-GDP does not automatically translate to an increase in taxes or introduction of new taxes because the incumbent administration remains focused on softening the operating environment and growing the economy.
Adedeji further stated that the agency, on his watch, would, in the next three years, achieve an eight per cent raise in tax-to-GDP ratio to surpass Africa’s average of 16.5% without sacrificing investors’ interests or retarding economic growth.
He said: “Our belief, understanding and vision as a revenue-generating agency is not to introduce any new tax as we only want to use data to improve compliance.
“Companies willing to voluntarily carry out their tax obligations have nothing to be afraid of.
“Our plan is simple. We want to grow tax revenue and we only want to tax prosperity and not poverty. Therefore, it is not in our interest to kill the trees that bear the fruits. My first ‘love letter’ to you is to appreciate what you have done. So, you don’t have anything to be afraid of.
“We will not collect what is not due to us. But we don’t want anyone not to pay what is due to us. Fair engagement is our plan. Rest assured that the 18% tax-to-GDP target will not translate to an increase in taxes.
“If you have been listening to Mr Taiwo Oyedele who is the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, you will have known that part of the mandate of the committee is to reduce the number of taxes,” Adedeji explained.
According to him, the purpose of the engagement with the companies is to factor their inputs into the strategic action plan being mapped out in order to address challenges hampering tax revenue collection.
He lauded the invited companies for their high sense of responsibility, urging them to continue to discharge their tax obligation diligently.
“I must also commend your commitment to upholding high tax compliance standards and responsible corporate citizenship, which sets you apart as the top taxpayers in Nigeria.
“This aligns perfectly with our vision of making taxation the pivot of national development through voluntary compliance. Your respective industries play a pivotal role in generating substantial tax revenue for the government and in shaping the economic and fiscal stability of the nation.
“We are not unmindful of the challenges facing businesses in Nigeria with the ongoing reforms to improve economic performance. These are painful but necessary choices we must make as a nation to attain our full potential,” he said.
The chairman, while responding to some of the concerns raised by representatives of the companies such as multiplicity of taxes, and duplication of tax oversight on corporate entities, promised to address the issues raised.
Some of the companies at the event included Nestlé Nigeria Plc, ExxonMobil, Shell, Guinness, Nigerian Breweries Plc, Flour Mills, Dangote Group, MTN, British American Tobacco company, First Bank, Access Bank, Guaranty Trust Bank, Zenith Bank Plc, KC Gaming Limited (Bet9ja), Airtel, Seplat, BUA Cement, Nigeria Liquified Natural Gas, NNPC Limited and others.