Proposed tax reform bills will foster tax compliance culture – Don
By Emmanuel Oloniruha
Dr Augustine Kutu, an Assistant Professor, University of Western Ontario- Canada, says Nigeria’s proposed tax reform bills will foster a culture of tax compliance and expand the nation’s revenue streams.
Kutu said this in an interview with the News Agency of Nigeria (NAN) on Thursday in Abuja.
He said that the proposed Value Added Tax (VAT) sharing formula would also promote fairness and economic growth among the regions in the country.
According to him, Nigeria has undergone numerous tax reforms over the years.
He said that the country introduced key legislations, like the Income Tax Management Act (ITMA) of 1961, VAT in 1993, and the Structural Adjustment Programme (SAP) in the 1980s.
Kutu said that the country also implemented the Consolidated Revenue Code (CRC) and several other reforms to transform its tax system, boost revenue generation, and diversify its economy to reduce its heavy reliance on oil.
“The present administration has recently proposed a comprehensive tax reform bill aimed at transforming Nigeria’s tax landscape and boosting revenue generation.
“This bill is part of a broader effort to modernise the country’s fiscal framework and promote economic growth.
“In spite of its potential benefits, the proposed VAT sharing formula in the bill has ignited controversy, creating a rift between the northern and southern regions,” he said.
He said that the formula, which allocates a larger share of VAT revenues to states where they are generated, has sparked intense debate and raised concerns about regional economic disparities.
“As an economist and policy analyst, I firmly endorse the overhaul of the tax system.
“I specifically advocate for a revised sharing formula that allocates 40 per cent based on equality, 40 per cent based on derivation, and 20 per cent based on population.
“This balanced approach promotes fairness, reflects regional economic contributions, and accounts for demographic factors.
“This revised formula will incentivise states to broaden their tax base by encouraging more individuals and businesses to contribute.
“It will, thereby, foster a culture of tax compliance and expand the states’ revenue streams,” he said.
Kutu advised governments at all levels to harness the power of technology to streamline tax assessment, collection, and accounting.
He said that by doing so, they could substantially enhance tax collection efficiency.
He said that they would, also, effectively capture revenues from digital businesses, such as social media platforms and music streaming services, and foster a more robust and sustainable fiscal framework. (NAN)(www.nannews.ng)
Edited by Kadiri Abdulrahman
Published By
- Senior Editor
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