Tuesday, 20 May 2014

GDP rebasing will boost Nigeria’s tax collection capacity...

Min­ister of Finance, Dr Ngozi Okonjo-Iweala
The Coordinating Minister for the Economy and Min­ister of Finance, Dr Ngozi Okonjo-Iweala, has said that one of the benefits of the recently re­based GDP exercise would be im­proved capacity for the revenues agencies to rake in more non-oil taxes to government coffers.

The minister made the sub­mission recently in Lagos at the Stakeholders Engagement Fo­rum organised by the Federal Inland Revenue Service (FIRS) to engage key business leaders, top government functionaries and corporate chieftains on the Service’s Capacity Enhance Pro­gramme, (CEP).

A statement by the Head, Com­munications and Liaison Depart­ment of the Service, Wahab Gb­adamosi, quoted the minister as saying that the GDP rebasing ex­ercise had demonstrated that the Nigerian economy is much more diversified than earlier assumed, explained that it also created the opportunity for improved rev­enue earnings as it challenges the Federal Inland Revenue Ser­vice (FIRS) and Nigeria to do bet­ter by exploring non-oil revenue sources for improved collection.

She said: “What the rebasing has done is to demonstrate that Nigeria has much more diversi­fied economy than we thought, services is now 51 per cent, up from 26 percent. Agric is now 33 percent from 22 per cent. The movie sector that was 0.7 per cent 10 years ago is now 1.2 per­cent. What I’m saying is that the Nigerian economy is evolving in terms of services.

“Services is now one quarter of the GDP. The point we are making is that the rebasing has demonstrated the potential in tax in a diversified economy base,  though Nigeria is not doing as good as Kenya and South Africa in tax to GDP ratio.’’

In his remarks at the forum, the Acting Executive Chairman of the FIRS, Alhaji Kabir Mashi, said the Service would be com­pelled to invoke relevant laws against taxpayers that refused to voluntarily fulfill their tax obli­gations. He explained that the reve­nues being collected by Govern­ment from the people served as a means through which they could participate in governance and comply with tax laws in demon­stration of good corporate citizenship.

Mashi appealed to those who do not comply with the tax laws or have defaulted in their tax obligations to fulfill their obliga­tions. He hinted that the Service, in its efforts to fulfil its statutory mandate, would not hesitate to invoke its powers under the laws in sanctioning tax defaulters where appropriate.

The FIRS boss however com­mended taxpayers for their ef­forts and contributions to the nation`s development over the years through payment of their taxes and solicited for their con­tinued cooperation and support. Mashi said: “We are constant­ly seeking to improve upon our performance and we ask that you buy in to our initiatives as we roll them out. As we imple­ment these initiatives, we shall interact with you more closely and hope that you see yourselves as partners in national develop­ment”.

The seasoned Tax Adminis­trator said that the Capacity En­hancement Programme (CEP) led by McKinsey and Company was among other initiatives be­ing embarked upon to improve performance and make Nigerian economy one of the largest in the world.

The FIRS’ boss listed some of the benefits of the initiatives as improvement in the areas of audits, arrears and debt enforce­ment, tax exemptions, evasion (high net worth transactions and rentals), registration, filing and improved communication as a means of enhancing compliance. Mashi said the implementa­tion of the innovative strategy was already impacting positively on the Service’s operational effi­ciency with results to show for it. (Source - National Mirror)

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