Nigeria Needs to Reduce Tax Compliance Costs

• Nigeria Needs to Reduce Tax Compliance Costs – PwC

PwC Nigeria has said the deployment of technology will help Nigeria to reduce tax compliance costs in order to encourage more people to pay taxes.

The Head of Tax, PwC Nigeria, Mr Taiwo Oyedele, spoke on Tuesday in Lagos on the sidelines of the firm’s Tax Academy, with the theme ‘Technology and tax: Navigating tax authorities’ digital platforms for effective tax compliance’.

Oyedele, who stressed the need to simplify the process of paying taxes through technology, said, “Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult.

“So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer. It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost.”

He said the technology would reduce the cost of compliance, adding “therefore, you can get more people into the tax net.”

Oyedele said, “Everything we do today is impacted by technology and technology is making things better, faster and more cost-efficient and cost-effective. So, it is no longer acceptable for authorities to live in the past.

“Even though Nigeria is starting late, they say, ‘Better late than never. So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns.”

Noting that getting a tax clearance certificate was like rocket science in the past, he said, “With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems. It is not enough to criticise; we must find the solution together.”

“With our experience dealing with other countries, we know things that work in other places; so it is very good that we have the Federal Inland Revenue Service, the Lagos State Internal Revenue Service and the Presidential Enabling Business Environment Council here today. It is the beginning of the process, and we hope that by this time next year, all these processes will be much better such that the experience of the taxpayer will be a lot better.”