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Nigeria can’t attain economic growth without citizens paying taxes as and when due, the Federal Government has submitted.

Vice President Yemi Osinbajo gave the submission, yesterday while declaring open the 24th tax conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja.

Represented by Executive Chairman of Federal Inland Revenue Service (FIRS), Muhammad Nami, Osinbajo said the present administration had realised that without prompt payment of their taxes, it would be difficult for the government to meet its obligations.

His words: “Previous administrations had depended almost wholly on oil for revenue, but when we came in, based on the lessons we learnt from the recent market trends that crude oil, like other commodities, is not a sustainable source of government revenue, we have shifted attention to tax.

“What we have learnt is that if we must make progress as a nation, all of us must pay our taxes for the sake of national development to foster harmony and economic growth.”

The Vice President said every Nigerian must be prepared not just to pay their taxes, but also to ensure that others do the same.

He observed that the theme of the conference, “Global Disruption, Taxation and Digitalisation: Implications For Socio-economic Development,” captures the prevailing realities within the national and global spaces.

Osinbajo continued: “Nigeria’s economy is fast digitalising. This means that the way and manner of doing business have changed. Indeed the radical change is brought about by digitalisation, which has made useless the traditional approach to tax administration.

“The digitalisation of tax administration is unavoidable, that is why our government has continued to heavily invest in the automation of tax administrative processes and digital infrastructure.

“It is in the best interest of the country that the government at all levels has enough revenue. The lingering issue of insecurity, crimes and criminality and inadequate social infrastructure can only be addressed if there is adequate revenue in the hand of government.”

He commended the institute for being a critical member of the taxation ecosystem in Nigeria.

“Taxation is a key driver of social harmony, political stability, economic development and growth.

“Your Institute is a pillar for socio-economic development and the emancipation of the down-trodden. It is my belief that your members will continue to discharge their responsibilities of ensuring that the interest of the larger society is not trodden upon, this you must do with patriotic zeal.

“I, therefore, urge you to support government and FIRS in the drive towards full digitalisation of the tax administrative processes. That is why in 2021, the President directed all stakeholders, including MDAs, to support the tax automation drive of the FIRS.

“Therefore I call on the CITN and every Nigerian to comply with tax rules and encourage others to comply and report those not complying so that we can build the Nigeria of our dreams. We must, therefore, take our destiny in our hands,” he appealed.

Earlier in his welcome address, CITN President, Adesina Adedayo, pointed out that the COVID-19 pandemic of 2020 disrupted the global economy yet to be fully addressed by world governments.

Chairman of Tax Conference Committee, Mrs. Ruth Arokoyo, said the conference was packaged to address some salient issues on the application of technology to optimime tax revenue.

Also in an interview with The Guardian, the immediate president of CITN, Dame Gladys Olajumoke, stated: “We need to start interrogating spending by government. We need to make them know that people will voluntarily pay tax if they see what the tax is being used for.”

Stakeholders in the small and medium enterprises (SME) sector have urged the government at all levels to desist from imposing unnecessary taxes on small businesses considering the effect of such on the growth of the sector and job creation.

They called for harmonisation of taxes levied on MSMEs operators by Local, State and Federal governments to reduce their financial burden for the benefit of the nation.

As of today, they claimed that the sector still employs over 50 percent of the country’s labour force, warning that failure to address concerns about double taxation will further create uncontrollable unemployment in the country.

Speaking to The Guardian on the issues of double taxation being suffered by the MSMEs in Nigeria, the Managing Director and Chief Executive of Paul Bou Nigeria Ltd, Eze Uzuegbu said that there is an urgent need for the government to address the problem without further delay.

Uzuegbu said: “Today, all of us are aware that the problems of insecurity, high cost of production, high cost of transportation among others, have greatly affected the growth of MSMEs, making things worse, just as governments’ imposition of different taxes compound production costs.

“Many of the MSMEs are folding up on a daily basis. This should not be so because several jobs have gone into extinction, making the youths to be vulnerably idle; the effects of this could be seen in the areas of increasing crime rate.”

He called on the government to create a business cluster environment based on thematic areas to help reduce cost and boost quality products for consumption and for exports.

He also advocated tax waivers and incentives to SMEs to enable them to grow their companies to standards.

Speaking at the recent SME Conference and Exhibition Organised by the Abuja Chamber of Commerce and Industry (ACCI), the President of the Chamber, Dr Al-Mujtaba Abubakar emphasised the need for the government to give small businesses a breathing space from multiple taxation.

The Chief Executive of Dideola and Co, a company that produces plastics, Mr. Durojaiye Moses urged the government to establish an MSMEs’ fund to assist operators instead of giving soft loans to friends and relations of those in positions of authority.

The challenging operational environment has continued to assail businesses in Nigeria, especially, listed firms, as investors at the weekend renewed calls for government at all levels to pay more attention to infrastructure development and other impeding factors and boost tax compliance.

The experts, who argued that listed firms were facing untold hardship due to the harsh operating environment, noted that if the government fails to improve infrastructure and revive the manufacturing sector, companies would continue to record losses, and may not fulfil, their tax obligation.

They noted that the integrated developmental master plans needed for sustainable infrastructure development in Nigeria were yet to be executed. Therefore, they suggested that the government should review its strategies and improve opportunities for quoted companies and entrepreneurs through the provision of adequate infrastructure facilities to boost their business operations and spur their willingness to pay tax.

A cursory look at some listed firms’ financial performance showed that Honeywell Flour mills in its financial year for the period ended March 31, 2022, announced an N983.8million loss, representing a 188 per cent decline from the N1.13 billion profit reported in the full year ended March 31, 2021.

The losses were attributable to a 32.9 per cent hike in the cost of sales, which rose to N124.86 billion in 2022 from N93.97billion in 2021.

The audited results also revealed 34.8 per cent increase in Honeywell Flour mill’s raw and packaging materials consumed to N111.44 billion in 2022 compared with N82.66 billion in 2021, which contributed 89.3 per cent on the overall cost of sales in the year under review.

Also, UAC Nigeria Plc’s audited results for the full year ended December 2021`revealed a profit of N2.59 billion, representing a 33 per cent decline from the prior-year N3.9 billion.

Although the company recorded growth in sales on the back of double-digit food inflation, bottom-line profit was greatly subdued by production, and finance costs, which increased by a whopping 28 per cent and 194 per cent, respectively, during the period under review.

According to the company, performance for the period was largely affected by high costs of sales as well as selling, distribution and administrative expenses, which also affected profit as a trickle-down effect.

For Dangote Sugar Plc, its full year 2021 results revealed a profit of N22.05 billion, representing a 26 per cent decline from 2020 performance.

Although the group’s revenue increased 28.8 per cent to N276.50 billion from N214.30 billion in 2020 on the heels of a strong growth trajectory recorded in the prior quarter the company’s gross profit, however, decreased 12.3 per cent to N50.21 billion from N57.22 billion due to continued rise in the cost of production witnessed during the year under review.

The President of Issuers and Investors Alternative Dispute Resolution Initiative (IIDRI), Moses Igbrude, said mitigating challenges confronting listed firms, especially in the areas of infrastructure and access to foreign exchange should be addressed.

According to him, the government needs to do more to stabilise the economy by developing infrastructure projects like electricity, road network, water, and railway among others. He added that when businesses become stable and viable, companies could make profit and fulfill their tax obligation.

The President of the Ibadan zone Shareholders Association, Eric Akinduro, said the government must be alive to its responsibility by creating an enabling environment for listed firms to grow.

“Business owners in Nigeria are working under an unfavourable environment where they need to provide light, water, security and even good roads on their own to do business.

“All these are the government’s responsibilities. If the government should work on these, businesses will boom in Nigeria, which will translate to improve the standard of living, and people will fulfil their tax obligations with ease. It would also reduce the rate of unemployment.

Tax payment is an obligation of every citizen, but in a situation where citizens do not derive benefits or see the impact of taxes on the economy, it would affect their willingness to comply. “Government should play its role, while individuals and companies should perform their own responsibility. Government officials should stop living in flamboyance and wasting national resources to the detriment of taxpayers.”

Vice-Chairman of Highcap Securities, Imafidon Adonri, said the development of a heavy industrial base would provide the engineering infrastructure required to sustain the productive momentum of the country’s light industries.

He pointed out that the government also needs to provide world-class basic infrastructures like a good road network, rail and ports, in addition to good technical education, and good healthcare.

According to him, if people are gainfully employed and able to meet their maintenance needs, they will be encouraged to pay tax.

“The manufacturing industry has a greater capacity to create wealth and generate productive employment. It is the best means of lifting people out of poverty.

“Government can formulate several enabling policies to make production businesses thrive in Nigeria.

“This will involve full privatisation of the economy, protection of the domestic production industry, encouragement of the private sector to develop the engineering infrastructure made up of the metallurgical industry, electric power industry and the energy industry.”

Furthermore, he argued that the government’s commitment is to use the money paid by taxpayers to provide for the social and economic well-being of the citizen.

Culled from The Guardian