Some civil society organisations (CSOs) and related groups in Nigeria have urged the President Muhammadu Buhari-led government to stop granting discretionary tax incentives.
They also urged the government to work towards boosting the confidence of citizens on how tax revenue is being used.
The calls were made at a two-day national tax summit on the emerging issues in the fiscal governance in Nigeria.
The summit, which was organised by ActionAid and the Tax Justice and Governance Platform, was attended by representatives of CSOs, government, the Federal Internal Revenue Service (FIRS), and the media.
Development Diaries understands that the Nigeria tax system is confronted with many issues and challenges.
Participants identified issues such as inadequate/non-available framework for informal sector taxation, and insufficient priority allocations from tax in the budget to the socio-economic sectors.
‘For instance, 84.7 percent of federal government revenue deployed for debt servicing is antithetical to development. Taxation not responding effectively to escalating incidence of poverty, inequality and social inclusiveness’, the communique issued at the end of the summit read in part.
‘No records of stamp duties remittances to the federal government coffers in the past three years. Low interest and action on the beneficial ownership policy of government by the tax administrative authority in the country to ensure intended tax benefits to the country and citizens’.
Participants called for greater transparency, accountability, and regular public disclosures on the expenditure of government revenue to boost the confidence of citizens on how tax revenue is being used.
They also asked the government to engage stakeholders to foster trust and deepen the conversations around tax issues in the country.
In addition, the participants said there should be focused advocacy to engage all critical stakeholders on the formulation and implementation of tax policies and laws geared towards the provision of gender-responsive social services.
‘The national assembly needs to ensure effective oversight of project implementation to ensure effective and efficient use of resources to guarantee value’, they recommended.
‘Tax incentives must be based on a thorough cost-benefit analysis, including an assessment of impact on the poor and vulnerable groups. The analysis must be made subject to public debate, scrutiny and parliamentary oversight.
‘The government should publish an annual overview of the costs of tax incentives to Nigeria to guide subsequent decisions.
‘Government should simplify the tax system to ensure a clear, and proper understanding of rates and easy filing of taxes to help increase the tax-to-GDP.
‘Government should leverage on new technology to boost tax collection. The federal government should provide free public education of the highest attainable quality, in accordance with the Government’s human rights obligations’.
Source: ActionAid
Photo source: Femi Adesina