Some experts have called on the Federal Government to widen the tax net to include the informal sector and unregistered businesses in order to increase the country’s revenue base.
The experts gave this advice at the Detail Tax Business Series programme with the theme, ‘Finance Act 2023: Implications on the tax & fiscal outlook for the new administration and the economy,’ which was organised by Detail, a commercial solicitor firm that specialised exclusively in non-courtroom practice.
This call came amid Nigeria’s low income generation, with debt servicing and recurrent expenditures taking up a huge chunk of the annual budget.
A statement issued by the organizers of the event said the panel of experts included Partner, PwC Africa & Family Business Leader, Esiri Agbeyi, and Partner and Head, Deal Advisory, M&A, Tax, KPMG Nigeria, Ajibola Olomola.
The panel was moderated by Associate Partner Anthony Ezeamama at Detail Commercial Solicitors.
The statement said the experts stressed “The need to increase the number of individuals and citizens in the tax net rather than increasing the tax rate.
“To do this, tax authorities should focus on taxation of persons in the informal sector and unregistered businesses, and there should also be greater collaboration among the authorities.”
The FG was also advised to focus on the taxation of consumption rather than production in order to enable the Nigerian economy to develop and check inflation.
With business owners lamenting how multiple taxes were crippling their businesses in addition to issues of infrastructural decay, insecurity, epileptic power supply, and foreign exchange shortage, the panelists urged the Federal Government and tax authorities to reduce or consolidate the existing tax laws as a way of tackling the issue of multiple taxation.
One other way of tackling the issue and easing the process of tax payment, the experts said, was for the tax authorities to explore the advantages of a single tax collection agency for the federation and the states, respectively.
This, according to them, had been successfully implemented in Kaduna State.
The panelists said there was a need for reorientation of citizens, even at the family level, to encourage tax payment.