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Taxation globally is seen as a way of mobilising and supporting a nation’s financial resources. In this vein many nations have been taking the initiative to ensure that the tax administration is efficiently operated. The Nigerian tax system is beset by myriad of challenges, such as non-availability of tax statistics, inability to prioritize tax effort, poor tax administration, multiplicity of taxes to mention a few. In the quest to make tax payment stress-free and convenient, and to improve the doing-business environment in Nigeria, the tax management agency has introduced some reform initiatives to reduce the time for filing and paying taxes by 50% and to improve transparency and efficiency in tax administration.
Already, the new tax reform initiatives are beginning to bring significant benefits to the government. The new tax reforms by the Federal Government has impacted tax revenue profile of the government as a record N5.3 trillion tax revenue was generated in 2018 based on data released by the Federal Inland Revenue Services (FIRS) recently. The tax reforms majorly centred on ease of filing federal taxes, tax amnesty for voluntary asset declarers (VAIDS) and getting more people into the tax net. The data released by the FIRS Chairman, Mr. Babatunde Fowler, recently showed that the N5.320 trillion collection is the highest revenue ever generated by FIRS in history. The highest in FIRS was N5.07 trillion generated in 2012. FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel. The oil price was at an average of $100 to $120 per barrel between 2010 and 2013. The non-oil component of the N5.320 trillion is N2.467 trillion (53.62 per cent), while oil element of the collection is N2.852 trillion (46.38 per cent). Mr. Fowler said: “I believe that if we continue with the same pace, we can reach 20% of the tax mix comprising of revenue from SMEs by 2019. The government fully supports us. Some projects may take a year or more to develop, but citizens’ belief in the tax system is uplifted even when they see work in progress. “Just like some of the other oil-rich countries, we never imagined that taxation would be the main way to generate revenue. Now we appreciate the fact that oil is a resource with a price determined by more developed countries, and with that, we are disadvantaged. “There is a 2026 agenda for African countries to be able to fund their budgets internally without grants or aid. It is something we can do right now. Nigeria can show the rest of the world that it can transform within a short time and fund its own budget with taxation as a primary source of revenue.” This reform initiatives, driven by the Presidential Enabling Business Environment Council (PEBEC), the Federal Inland Revenue Service (FIRS), the Kano State Inland Revenue Service (KIRS) and the Lagos State Inland Revenue Service (LIRS), include: stating the timeline to complete corporate income tax (CIT) audit on the website; registering companies on the E-filing platform and creating a simplified single schedule for each tax type on the platform, an FIRS report recently indicated. Thus with these reforms, the report said taxpayers now file and pay federal taxes online from the comfort of their offices or home; taxpayers now make electronic payment and filing of state taxes including PAYE, etc. and employers now remit statutory deductions on behalf of personnel online. In addition, corporate income tax (CIT) audits is now done within a 63-day timeline and there is access to e-platforms for all classes of tax payers. The report also indicated that the process is simple and seamless as all that the tax payer needs to do is visit the FIRS website, file all federal taxes online and to pay for Value Added Tax and Company Income Tax. Other benefits of these online tax payment platforms include; improved transparency and efficiency in tax collection and administration and improved tax revenue to even make tax payers experience better, the report said, adding that continuous improvement on the e-platform for better taxpayer experience is based on feedback received. For Lagos and Kano states, which represent the two hubs of business in the nation, tax payers can also visit the Lagos Inland Revenue Service (LIRS) and Kano Inland Revenue Service (KIRS) websites to make electronic payment of taxes including monthly PAYE. To enhance service delivery, electronic self-service help desks are available at all FIRS offices for payment of taxes. Dr. Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade and Investment said: “We are pleased with the results the reforms are achieving, and we hope that as we work to deepen these reforms they will further strengthen the system to truly drive economic growth.”