Home > Nigeria’s tax amnesty: Weighing the costs and readiness

Post types

Featured posts


Tyla Yaweh & Tommy Lee Ft. Post Malone - Tomm...

Read more

Tory Lanez & VV$ KEN - 392 (Video)

Read more

King Von & Lil Durk - Down Me (Video)

Read more

Duke Deuce - KIRK ft. Mulatto (Video)

Read more

Big K.R.I.T. - K.R.I.T. Iz Here [Short Film]

Read more

Nigeria’s tax amnesty: Weighing the costs and readiness

Nigeria’s tax amnesty: Weighing the costs and readiness
At the turn of events due to the fall in the international price of crude oil, Nigeria’s major revenue source and foreign exchange earner, professionals were unanimous that non-oil sector development and harnessing of tax opportunities are the next big things for the country.

While the crude oil crisis and irresponsible management of public funds have been the bane of the country’s development, inefficient tax system leading to tax avoidance and outright evasion has re-ordered compliance level.

Granted, the nearly 30-month oil price crisis has affected economic activities across board. It has stoked debt defaults, credit sq££ze, poor profit level/losses for majority of corporates, through the transmission mechanism of low purchasing power, low consumption, inflation and foreign exchange rates. Yet, the country is deep-seated into the culture of non-voluntary tax compliance.

The Federal Inland Revenue Service, as a way to rev up revenue pool for the government, has enlisted more companies in its “dragnet”, but compliance has remained an issue, particularly, with the recession that keeps grinding activities.

FIRS had set a revenue target of N4.9 trillion in 2016, but by the first quarter of 2016, key revenue generating agencies of the Federal Government failed to meet revenue targets, resulting to revenue shortfall in excess of N916.3 billion. This trajectory has persisted until now.

About 53 days ago, FIRS, in a dramatic policy shift announced the opening of a special window, which would waive off penalties and interest charges for tax defaulters between 2013 and 2015.

Already, experts have said it is a win-win for both the government and identified tax defaulters.

Unfortunately, the window has closed on November 24. But the agency said the response was commendable. This means that a fresh vista of hope may have been opened for the cash-trapped government. The window though, was left open for only the members of the National Association of Small and Medium Enterprises.

The dilemma has also remained by the fact that government is looking for funds, with shortfalls already in its revenue target, yet the new policy would discount billions of Naira for the defaulters. How beneficial will this step be to the country? Will it widen the pool of taxpayers in the country? Is this the wisest step to take given the current circumstance?

A lawyer and tax administrator, Chukwuemeka Eze, said in a period of recession like this, government needs to take unusual measures that have been tested elsewhere by way of financial engineering to change the negative fiscal template of the economy and the present policy is one of them.

“As you know, we are in the eleventh hour of the 2016 Budget and there is need to improve the performance of the Budget. The Senate is already complaining that they are tired of passing budgets that will not be implemented by the Executive.

“Without more funds, there is basically nothing the Executive can do to improve budget performance. I am sure that FIRS has reaped bountifully from this policy,” he said.

The President of the Chartered Institute of Taxation of Nigeria, Dr. Olateju Abiola Somorin, at the body’s 12th induction ceremony, said the 45-day tax amnesty on penalties and interest regarding outstanding tax liabilities for the years 2013 to 2015 provided the tax defaulters a rare opportunity.

For the institute, she said, it is a bold move by FIRS. It also showed that the initial position of the FIRS that the amnesty was applicable only to taxpayers who have been audited and issued assessments has now been revised to cover voluntary disclosures and self- assessments.

“This revised position is more consistent with the content of the FIRS Public Notice released on the subject matter and the general intent of a tax amnesty. Our Institute has forwarded reactions on five specific issues to National Tax Policy Review Committee, which are geared towards effective delivery of a virile tax system.


No Article in the category


Leave a comment