Experts have called on the federal government to restructure the finances of the country such that the share of the nation’s revenue that it earns from taxation is judiciously utilised calling for more transparency.
The federal government last week proposed an increase in Value Added Tax (VAT) by 44 per cent to 7.2 per cent from five per cent and the introduced the Police Trust Fund levy. This it said was to increase the country’s revenue base.
The Nigerian Police Trust Fund Act which was passed by the National Assembly in April 2019, and signed into law by the President on 2 July 2019, imposes a levy of 0.005 per cent of the net profit of companies operating business in the country.
According to the president of the Chartered Institute of Taxation of Nigeria (CITN), Dame Olajumoke Simplice, this is important because of the need for government to invest in infrastructure. “Let us see improvements in infrastructure especially power, roads, education good health. When all these are put in place, you will see that Nigerians are good people and good citizens. We only need good leadership, we need to see that government means well for us, we will pay our taxes.
“We Nigerians should now start to hold the government responsible, let us see what the money is used for. Let us make sure that money is used to provide the goods and services that the masses of this country needs. Let us ensure that the tax money is working for the stakeholders, the taxpayers.”
Commenting on the taxes, Head of Tax and Corporate Advisory Services at PwC Nigeria, Taiwo Oyedele, stated the need for government to block leakages as a way of growing its usable revenue noting that imposing more taxes on businesses is counter-productive.
He noted that the police trust fund levy which takes N5 from every N100,000 of net profits is a bad move and it is not in the interest of Nigerians. “You say police needs funds, that is a fact and you say let’s levy businesses so that we can fund the police, that is a very wrong move.
On his part, partner & chief economist at PwC Nigeria, Andrew Nevin, said there is need for government to focus on the top echelon of the Nigerian society and make sure they pay taxes first, instead of imposing new taxes on middle class citizens and creating administrative bottlenecks for businesses.