Civil Society Organizations (CSOs), under the auspices of The Tax Justice and Governance Platform, (TJGP) have called on the federal government to concentrate more efforts on ensuring the proper collection of appropriate taxes than increasing the Valued Added Tax.
The group, in a statement, urged the federal government to concentrate on chasing taxes “from multinationals and large corporations which have continued to benefit from undeserved tax incentives and had for years engaged in tax avoidance practices.”
They also called on the government and relevant institutions “to develop strategies to curb the tax avoidance practices of big businesses in the country and pay attention to challenges of the illicit financial flow that has continued to undermine the economy.”
The group said: “We have followed with keen interest, the trend around the Federal Government’s effort to improve revenue mobilization to fund development in Nigeria. There has been diverse views from different interest parties on which measures will be more strategic and sustainable. Finally, the Minister of Finance announced an increase in the VAT rate at the last Federal Executive Council meeting held on the 11th of September 2019 after several denials of the possibility of an increase in the VAT in Nigeria”.
The body of CSOs advocated that government should “design and implement policies and programmes that enhance the welfare of the poor and protect disadvantaged groups that constitute much of the Nigerian population and address issues of inequality.”
According to the group, government should “pay serious attention to widening the tax net rather than increasing the rate which will only place more burden on the few that comply already and still exempt the majority that do not pay taxes.”
The group further said:”Before increasing the VAT, the government should consider: Who bears the burden of the tax increment? What main drivers could inform and/or justify the decision for a VAT increment? What are the real issues around VAT: remittance (collection) or rate? How well has the little been used and what are the assurances that an increase would alleviate economic conditions? What systematic measures have been taken to ensure tax compliance? Are there no other options available to the government to mobilize revenue?”
The group is demanding that the federal government should “provide additional information and details on the proposed measures for the purposes of public debate and multi-stakeholder input.”
“We want empirical projections and evidence based expected outputs that indicate that the tax yield from some of the measures would outweigh any disadvantage and potential negative impact and that the majority of Nigerians will be the ultimate beneficiaries of the proposed measures,” he said.
The group also wants the government “to establish the beneficial ownership register in Nigeria as a measure to know people’s real worth and what they are liable to pay as tax and fully implement the BVN policy as a measure of tracking peoples’ tax liabilities, especially the wealthy individuals who have not been paying tax.”