How Proper Taxing will Enhance Nigeria's Prosperity

The International Monetary Fund (IMF) has said that proper and coordinated taxing can lead to a fairer and greener world economy. In its recent blog post titled, “Tax coordination can lead to a fairer, greener global economy.” The IMF urged countries to do more to promote beneficial information on who really owned a company. Technology, globalization and global warming have changed the world and taxation must keep pace. With a mouse click, individuals can move money across borders and corporations can transact business with their affiliates across global supply chains. Production depends on the intangible know- how, assets that can be located anywhere. Employers and their employees can work in different countries. As incomes and factors of production become more mobile, with climate change becoming more threatening to our planet, countries face tax challenges that know no national borders. Coordination can deliver tangible results and 163 countries have agreed to exchange information under the Global Forum on Transparency and Exchange of Information for Tax Purposes. Yet, more can be done to improve the liability of information. Countries should do more on who owns or controls a company. The IMF reiterates that the effective use of information remains critical as enforcement by low income countries would need to develop more know-how to realize the benefits of transparency. When mechanisms are established, information from registries should be centralized in a public database. Low incomes countries like Nigeria will need to develop more know-how to tackle tax evasion and avoidance which cause the loss of revenue that could finance social spending or infrastructure investments. The IMF warns that if countries set their own tax policy without regard for the adverse effects elsewhere, all countries could end up worse of. Tax evasion and avoidance also exacerbate inequality and perceptions of unfairness. The self-serving national policy of one country can affect others in damaging ways, the Washington money lender affirmed. Sadly, with regard to the Nigerian authorities, government tax waivers compromises transparency. Waivers also cause a lot of revenue loss to the detriment of proper gains from taxation. In the same vein, the House of Representatives Committee on Public Accounts has vowed to ensure accountability on the capital allowances granted to MTN Nigeria by the Federal Ministry of Industry, Trade and Investment amounting to N2.6 trillion. Thus, the committee has summoned the Minister of Industry, Niyi Adebayo for justifications. The Committee chairman, Oluwole Oke, at the resumption of the investigative hearing on audit queries on tax evasion issued by the Office of the Auditor-General of the federation, noted that the report indicated that the documents relating to the N2.6 trillion capital allowances were forged. The chair also noted that the committee had invited MTN Nigeria over alleged tax evasion. He also said the OAuGF, in its report, observed that the Federal Inland Revenue Service accorded value to the telecoms company, The committee said MTN cannot absolve itself without certificates and evidence of capital allowance issued by the ministry which reflects the entire assets procured by the company. The lawmaker said there are issues in the country where funds are not adequate for government to carry out policies and programmes which was why the government had to borrow even though there are massive revenue leakages. According to Mr Oke, “MTN has also made appearances, where N2.6 trillion was seen as the taxable value for assets of the company and we asked to know where they exist and who verified them because they had already claimed value with the FIRS.” Oke pointed out that Nigerians have a right to know the implications of MTN getting tax waivers of N2.6 trillion on the Nigerian economy. The chair said, “Parliament simply wants to know whether it should sustain the query raised by the Auditor General or absolve the company of the allegations of tax evasion. At the end, the committee resolved that all who inspected MTN from the Ministry should appear before it. The committee also requested for the tax records covering the periods under review from both MTN and FIRS for further legislative scrutiny. From the foregoing, you can see how public officials fleece the country of revenues due to her, and thereby keeping Nigerians in perpetual poverty. Another example of the evils of the government’s tax waiver policy is the poorly executed Apapa/Oshodi Expressway reconstruction project in Lagos State. The road was built by Dangote Industries Limited as part of a federal waiver policy instead of tax payment. It was shoddily executed without proper supervision and the waiver beneficiary could inflate the cost to its benefit. For other sources of tax revenue, government should stop granting waivers to preferred companies and instead extend loans to small and medium enterprises (SMEs) in order to bring them to taxable sector and thereby broaden the economy. The Guardian editorial The International Monetary Fund (IMF) has said that proper and coordinated taxing can lead to a fairer and greener world economy. In its recent blog post titled, “Tax coordination can lead to a fairer, greener global economy.” The IMF urged countries to do more to promote beneficial information on who really owned a company. Technology, globalization and global warming have changed the world and taxation must keep pace. With a mouse click, individuals can move money across borders and corporations can transact business with their affiliates across global supply chains. Production depends on the intangible know- how, assets that can be located anywhere. Employers and their employees can work in different countries. As incomes and factors of production become more mobile, with climate change becoming more threatening to our planet, countries face tax challenges that know no national borders. Coordination can deliver tangible results and 163 countries have agreed to exchange information under the Global Forum on Transparency and Exchange of Information for Tax Purposes. Yet, more can be done to improve the liability of information. Countries should do more on who owns or controls a company. The IMF reiterates that the effective use of information remains critical as enforcement by low income countries would need to develop more know-how to realize the benefits of transparency. When mechanisms are established, information from registries should be centralized in a public database. Low incomes countries like Nigeria will need to develop more know-how to tackle tax evasion and avoidance which cause the loss of revenue that could finance social spending or infrastructure investments. The IMF warns that if countries set their own tax policy without regard for the adverse effects elsewhere, all countries could end up worse of. Tax evasion and avoidance also exacerbate inequality and perceptions of unfairness. The self-serving national policy of one country can affect others in damaging ways, the Washington money lender affirmed. Sadly, with regard to the Nigerian authorities, government tax waivers compromises transparency. Waivers also cause a lot of revenue loss to the detriment of proper gains from taxation. In the same vein, the House of Representatives Committee on Public Accounts has vowed to ensure accountability on the capital allowances granted to MTN Nigeria by the Federal Ministry of Industry, Trade and Investment amounting to N2.6 trillion. Thus, the committee has summoned the Minister of Industry, Niyi Adebayo for justifications. The Committee chairman, Oluwole Oke, at the resumption of the investigative hearing on audit queries on tax evasion issued by the Office of the Auditor-General of the federation, noted that the report indicated that the documents relating to the N2.6 trillion capital allowances were forged. The chair also noted that the committee had invited MTN Nigeria over alleged tax evasion. He also said the OAuGF, in its report, observed that the Federal Inland Revenue Service accorded value to the telecoms company, The committee said MTN cannot absolve itself without certificates and evidence of capital allowance issued by the ministry which reflects the entire assets procured by the company. The lawmaker said there are issues in the country where funds are not adequate for government to carry out policies and programmes which was why the government had to borrow even though there are massive revenue leakages. According to Mr Oke, “MTN has also made appearances, where N2.6 trillion was seen as the taxable value for assets of the company and we asked to know where they exist and who verified them because they had already claimed value with the FIRS.” Oke pointed out that Nigerians have a right to know the implications of MTN getting tax waivers of N2.6 trillion on the Nigerian economy. The chair said, “Parliament simply wants to know whether it should sustain the query raised by the Auditor General or absolve the company of the allegations of tax evasion. At the end, the committee resolved that all who inspected MTN from the Ministry should appear before it. The committee also requested for the tax records covering the periods under review from both MTN and FIRS for further legislative scrutiny. From the foregoing, you can see how public officials fleece the country of revenues due to her, and thereby keeping Nigerians in perpetual poverty. Another example of the evils of the government’s tax waiver policy is the poorly executed Apapa/Oshodi Expressway reconstruction project in Lagos State. The road was built by Dangote Industries Limited as part of a federal waiver policy instead of tax payment. It was shoddily executed without proper supervision and the waiver beneficiary could inflate the cost to its benefit. For other sources of tax revenue, government should stop granting waivers to preferred companies and instead extend loans to small and medium enterprises (SMEs) in order to bring them to taxable sector and thereby broaden the economy.