Business Hilights
Tracking Nigeria's Headline Business News Online

Advert space

Poor accountability, weak capacity spurred use of tax consultants by govts—NTP report

Startling revelations have emerged on why three tiers of governments have been making use of consultants in the collection of taxes. The new report of the National Tax Policy (NTP), which was approved by the Federal Executive Council last month, has linked issues of poor accountability, weak capacity and corruption as the major factors compelling governments to avoid using recruited tax officers in the job.

The policy document said “the country’s tax system was affected by poor accountability of tax revenue; insufficient capacity, which had led to the delegation of powers of revenue officials to third parties, thereby creating complications in the tax system; and the use of aggressive and unorthodox methods for tax collection”.

The report also noted that despite the potential of taxation as a dynamic tool for sustainable national development, the Nigerian economy over the years had not derived the maximum benefits of its tax system in terms of revenue generation.

The NAT document added further in its executive summary that “the nation’s tax system had been plagued by numerous challenges such as lack of robust framework for the taxation of the informal sector and high network individuals, thus limiting the revenue base and creating inequity; fragmented database of taxpayers and weak structure for exchange of information by tax authorities, resulting in revenue leakage”.

“Other challenges facing the tax system as inordinate drive by all tiers of government to grow Internally Generated Revenue, which had led to the arbitrary exercise of regulatory powers for revenue purpose; and lack of clarity on taxation powers of each level of government and encroachment on the powers of one level of government by another.

Already, the NTP is seeking for immediate review of certain provisions so as to be in tune with modern realities.

Under Appendix B, the document listed some of the areas for review as commencement, change of accounting and cessation rules; Excess Dividend Tax; minimum tax; taxation of insurance companies; Value Added Tax; intra-group transactions and stamp duty.

Others are Capital Gains Tax; withholding tax on dividend declared by companies engaged in gas utilisation projects; restriction of capital allowance claim; holding companies; and Real Estate Investment Trusts (REITs).

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More