Taxation Guru Canvasses Reform in Nigeria’s Tax system

Taxation Guru Canvasses Reform in Nigeria’s Tax system

Taxation Guru Canvasses Reform in Nigeria’s Tax system

Professor Olateju Abiola Somorin, Guest Speaker at a Town and Gown Seminar of the Accounting Department

A former President of the Chartered Institute of Taxation of Nigeria (CITN) and first female Head, Association of African Tax Institutes (AATI), Professor Olateju Abiola Somorin, has suggested to government the adoption of a simple tax system with low tax burden, coupled with few other broad-based taxation initiatives as recommended by a 2003 Study Group.

The Guest Speaker made the call on Monday, February 5, 2018, at a Town and Gown Seminar of the Accounting Department, Covenant University, where she delivered a lecture on the theme, ‘Current Trends and Contemporary Issues in Direct and Indirect Taxes in Nigeria’.

Popularly known as “TEJUTAX”, the retired Coordinating Director of the Federal Inland Revenue Service (FIRS), said the citizenry should support progressive taxation, which will see the wealthy pay their fair share of higher rates of tax.

According to her, while the principle of progressive taxation has been supported, almost unanimously, by democratic choices in countries around the world, African countries should continue to favour such choices. “To advocate progressive taxation is to oppose regressive tax systems, where the poorer sections of society pay a higher share of their income,” she added.

Professor Somorin called for the finances of wealthy individuals to be visible to tax authorities, to pay taxes commensurate with their wealth. She noted that the general business markets work better, and companies more accountable, in an environment where transparency is the order of the day.

She canvassed support for simplicity of the nation’s tax codes and a level-playing field on related matters, as complexities and loopholes distort markets, undermines competition; misdirect investment and reward economic free riders. “These distortions favour multinational companies over national ones; they promote big companies over small, and they hinder start-up companies in the face of established vested interests,” she emphasised.

The Guest Speaker, who is also the Chairperson, Fiscal Environment Thematic Group (FETG), a Sub –Unit of Nigeria Economic Summit Group, posited that Nigeria was due for another round of tax reform towards implementing the recommendations of the 2002/2004 Study Group, and to ensure that federating states, that are not yet autonomous, be granted the status by their governors in order to enjoy an effective tax system and a robust and improved tax revenue yield.

She identified over seventy-two trending contemporary issues affecting taxation in Nigeria. These include tax evasion and corruption, a multiplicity of taxes, amendment of taxes and levies Decree 21 (1998), citation of company income tax Act, Amendment of Section 29 Commencement Provisions, Stamp Duties Act Amendment Bill (2017), Amendment of Education Tax Act (PITA) 2011 among many others.

According to the immediate past President, West African Union of Tax Institutes (WAUTI), the tax is the link between every state and her citizens, and tax revenues are the lifeblood of the government’s social contract with its people. She regretted that Nigeria had only recently started to take taxation seriously when the FIRS and other IRS’s were granted both administrative and financial autonomy, as the country had for long ignored taxation.

“I am pleased that focus has now been shifted to the taxation of the non-oil sector in recent times. Sustained action on taxation is the only way out, to promote the Nigerian economy,” Professor Somorin enthused.