By Merit Ibe
In its bid to address challenges faced by businesses to create an enabling environment, the Federal Inland Revenue Service (FIRS) has announced plans to detect tax evaders, recover lost revenues and prevent leakages through improved tax enforcement schemes.
The Executive Chairman, FIRS, Zacch Adedeji, made the disclosure at the annual Commerce and Industry Correspondents Association of Nigeria (CICAN) annual workshop themed: “Effects of Federal Government’s Tax Reforms on the Economy.”
Adedeji noted that the move was coming on the heels of the pronouncement of the Federal Government’s desire to raise tax to Gross Domestic Product (GDP) ratio to 18 per cent over the next three years without having to impose additional taxes, saying this would be achieved through the use of tax laws to boost compliance.
Adedeji, who was represented by the Director and Coordinator, Lagos Island FIRS, Mrs. Oyeniyi Fadekemi, stated that the success of these reforms relies not only on the government but also on the active participation and cooperation of the business community.
He therefore, called all stakeholders to embrace these reforms, fulfil their tax obligations and work hand in hand with the government in achieving the common goal of building a strong and resilient economy. He said it was imperative that Nigeria’s tax policy reforms are effective, fair and encourage investment and innovation.
He observed that over the years, Nigeria has recognised the need for tax policy reforms to address the challenges faced by businesses to create an enabling environment for economic growth.
“It is instructive to note that part of the Renewed Hope Agenda of President Bola Ahmed Tinubu is to reform the tax system.
On assumption of office, Tinubu had set up a Presidential Committee on Fiscal Policy and Tax Reforms headed by Mr Taiwo Oyedele, alongside other eminent Nigerians representing various institutions and professional bodies with the mandate to reform the tax ecosystem,” he added.
“This reform is expected to lead to fiscal discipline, remove all impediments in our tax system and eliminate the ambiguity in our tax laws that will culminate in the ease of doing business which will ultimately lead to improved revenue generated from taxes.”
He stated that another critical aspect of the government’s tax policy reforms was the promotion of voluntary compliance, stressing that rather than resorting to punitive measures, the government believes in fostering a culture of voluntary tax compliance through educational campaigns, awareness programmes, and taxpayer support services.
Also speaking, the Director General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, said the association’s vision to be the key driver for industrialisation through sustainable economic growth and development in Nigeria has been the thrust of the services it offers to manufacturers in Nigeria.
He said MAN was hopeful that the outcome of the conference will deliver positive issues and practical steps that will be transmitted to the Presidential Committee on Fiscal Policy & Tax reforms to further enrich their deliberations and decisions to the benefit of the growth and development of the manufacturing sector and the Nigerian Economy at large.
On his part, the Chairman, Spectra Industries Limited, Chief Duro Kuteyi, lamented that many Small and Medium Enterprises (SMEs) are closing shops due to the harsh operating environment, pointing out unavailability of raw materials as a result of farmer-herder clashes is hindering operations of many SMEs in the country.
He stated the need for the present administration to give tax waivers for SMES to thrive, saying that SMEs need protection for their growth and development.
“SME protection is needed for their growth. There is an urgent need to stimulate the growth of SMEs with tax forgiveness. We will double Nigeria’s GDP if this happens,” he said.
The Chief Executive Officer, WVL Developers Limited and former Acting Managing Director, Bank of Industry, Waheed Olagunju, stated that with technology and the can-do spirit of Nigerians, the nation would achieve rapid industrial growth, saying that without technology, Nigeria would not have achieved so much progress thus far.
The Chief Executive Officer, Centre for Promotion of Private Enterprise (CPPE), Muda Yusuf, in his goodwill message, said Nigeria is at a point of sacrifice, saying that the burden of the sacrifice is heavier on the common man.
He stated the need to hold the federal government accountable, advising that the outcomes of their economic reforms must benefit the citizens.
“We need to hold the government accountable it is very important, we don’t have to see a situation where as a result of the reforms we are moving resources away from the people into the hands of politicians and that is most unjust . The outcome of the subsidy removal must benefit the people. These savings need to trickle down to the people so they can have impacted.
The issue of accountability is very important especially in the management of our finances so that this economy can move forward.
Earlier in his welcome address, the CICAN National Chairman, Charles Okonji, said since the pronouncement of the fuel subsidy removal, many manufacturing outfits have closed shop.
He said tax policies are critical for Nigeria’s growth and development, calling on the federal government to urgently rejig its tax policies to attract potential investors and investors that have relocated outside the shores of the country due to the harsh business terrain.
The Director General, National Association of Chambers of Commerce Industry Mines and Agriculture ( NACCIMA), Sola Obadimu, who was represented by Dr Chukwuka- David noted that there were two challenges concerning policy summersault.
He lamented that in 2014 the national conference held had lots of ideas that the immediate past government should have implemented to solve the country’s problems but however for political differences nothing has been done.
“A policy is a policy, no matter the party, you need to build on it but not in our own case in Nigeria and that is affecting the country negatively.
Between 2014 and 2023 compare life and livelihood, you will discover that we have come downwards. The primary thing should be citizens are not political parties
The second challenge is the independence of the judiciary. As long as the judiciary is not independent whatever you are doing is kind of putting the cat before the horse. The judgment of the judiciary sometimes creates fear in the mind of investors whether it’s political judgment or whatever, it creates unstable situation in the economy as long as these circumstances are there we have issue. The judiciary is not the major problem, the major problem are the politicians.
Today we have a situation in the country that is almost uncomfortable for everybody but we have political appointments in this dispensation of over 50 ministers. How do we talk about fiscal expenditure. Each of these ministers have their own aides and each of these aides are multiplying so even if the CBN decides on fiscal mop up or a situation where they say let’s see how we can control inflation are we going to stop these ministers from reckless expenditure? These are part of the issues that tax reforms really needs to look into and tell the government that fiscal expenditure will negate whatever tax reforms that even the CBN of minister of finance are trying to put together.
SMEs are suffering manufacturers are suffering and as long as this situations are there investors who are interested in coming in will be discouraged.
Nigeria is one of the best countries in the world from what he has seen this is the place to invest and make it. If you are ambitious in this country you will make it. Look into agriculture the door is open endlessly. The energy Industry the door is open.
I want to appeal that tax reforms should look at the necessity of helping the SMEs in particular and building up a startups to help them either by tax holiday, it could be for five years. The laws that should be structured should help bring in Foreign Direct Investment ( FDI) into the country for stability and the economy.
Princess Funmilayo Bakare Okeowo, Managing Director and CEO, FAE Ltd lamented that so many things were wrong and that she
has invested so much in manufacturing and wants to have a return on her investment.
She also called on government at all levels to give listening ears to small industrialists.
“Some days ago, I was in Cairo at the Intra African international trade fair. We had about six governors that I don’t want to mention names we could not access them. The master servant mentality must change. They should come to our level. We are ready to embrace them. We are ready to work with them. We know that the problem on ground is enormous.”
She urged govenrment to move along with small industrialists while scouting for foreign investment and not just big companies.
“While our government are traveling for investment opportunities, they should go with small industrialists not career politicians or big industrialists.
All these things must change.
“If you take the small industrialists out, when we come back we will infuse the knowledge, learn more and improve Nigeria economy.
We are all aware that China now is the beautiful bride of the world. They are being sponsored by the Chinese government.
They are industrialists. Our government should do same to us. We will pay. We are ready to pay.
Look at the paper mill sector. We don’t have a functional paper mill in Nigeria. We have everything here as raw materials in Nigeria.
And the gestation period is just six months.
We can export paper, we need government to help us. These politicians should have a different mindset. We voted them into power, but we need them not to look at themselves as gods.