In a bid to bolster the country’s revenue streams, a chorus of experts has called upon the Federal Government to extend its tax reach to encompass the informal sector and unregistered businesses.
This pivotal recommendation was echoed during the Detail Tax Business Series event themed “Finance Act 2023: Implications on Taxation and Fiscal Prospects for the New Administration and the Economy.”
The event, orchestrated by Detail, a distinguished commercial solicitor firm renowned for its non-courtroom specialization, brought together prominent voices to deliberate on strategies for enhancing fiscal stability.
This clarion call arrives in the midst of Nigeria’s ongoing struggle to augment its income generation, as the weighty demands of debt servicing and recurrent expenditures continue to carve a substantial share from the annual budget.
Issuing a joint statement, the event’s organizers underscored the participation of a distinguished panel of experts, including Esiri Agbeyi, Partner at PwC Africa and Family Business Leader, alongside Ajibola Olomola, Partner and Head of Deal Advisory, M&A, and Tax at KPMG Nigeria. The discourse was adroitly moderated by Anthony Ezeamama, Associate Partner at Detail Commercial Solicitors.
The crux of the experts’ message revolved around an imperative shift: an urgent need to expand the tax net’s scope by enlisting more individuals and businesses, as opposed to a simple hike in tax rates. With Nigeria grappling with insufficient income inflow, this pragmatic approach targets the taxation of entities operating within the informal sector and unregistered enterprises. To fuel progress, experts emphasize the significance of enhanced collaboration among tax authorities.
Also, experts propose a strategic pivot in tax policy — favoring the taxation of consumption over production. This strategic move, they contend, holds the potential to nurture the burgeoning Nigerian economy, all while curbing inflationary pressures.
Amidst the clamor from beleaguered business owners who lament the stifling impact of multiple taxes, coupled with infrastructural decay, security concerns, erratic power supply, and foreign exchange scarcities, the panelists urge both the Federal Government and tax authorities to curtail and consolidate the existing tax laws. This approach, they argue, is a pragmatic route to mitigate the stifling effect of multiple tax burdens.
A beacon of inspiration emerges from Kaduna State, where the establishment of a unified tax collection agency for the federation and individual states has proven successful. This precedent, heralded by the experts, underscores the potential for a streamlined and efficient tax collection mechanism.
