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The Imperative Of Widening The Tax Net Ikeja

Posted by Sunmola Olalekan Private Ikeja
Price: NGN 10
A national consensus seems to have emerged that increasing the Value Added Tax (VAT) rate at this point will deepen the economic misery of the average Nigerian already overburdened by the yoke of broken social infrastructure. For the hard-pressed workers, such proposition will only mean that the government is desirous of retrieving with the left hand what it just gave out, albeit grudgingly, with the right hand by way of the recently approved minimum wage which many states may not even be able to pay. Besides, government, at all levels, has failed to discharge their obligation in the social contract as can easily be seen in collapsed social infrastructure and worsening insecurity across the land.
Given the foregoing, the only reasonable idea on the table is to widen the tax net. The idea becomes more plausible against the background of the latest reports by the Federal Inland Revenue Service (FIRS) that it has captured the identities of 45 million individual and corporate entities. The milestone was made possible by the resolve of the federal tax authorities to shift focus this year by putting more energy into the enumeration of taxpayers through TIN (Tax Identification Number) registration exercise. To achieve this feat, the FIRS had to synergies with other government agencies like the Corporate Affairs Commission (CAC), Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC), Federal Road Safety Commission (FRSC), among others. This is partly a fulfillment of the original promise of the idea of having an integrated national database. Indeed, the imperative of having to explore other revenue sources cannot be overstated considering the perennial volatility of the oil price in the international market and the necessity to wean the nation of overdependence on oil revenue for sustenance. The urgency of this need will surely become even more manifest in the times ahead as the already financially stressed federal authorities grapple with the challenge of seeking funds to deliver on the approved N8.9 trillion budget for 2019 and the state governments having to shoulder additional financial burden arising from the new minimum wage of N . It is commendable that the FIRS has been able to improve on its performance by automating its processes to not only cut operational costs but also curtail abuses, leakages and wastes in line with international best practices. We see this as one of the reasons for the steady growth in the national tax revenue in the past few years: from N3.3 trillion in 2016 to N4 trillion in 2017 and N5.3 trillion in 2018. What makes the rising graph quite significant is that it happened when the national economy was supposed to be contracting on account of the deleterious effects of the recession that hit the nation, from which it only began to show signs of slight recovery in the last quarter of 2017 after two years.

Source; this days

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