Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient/effective tax system.
The Joint Tax Board (JTB), at its 135th meeting held on 25 and 26 July 2016 made a number of resolutions aimed at boosting Internally Generated Revenue (IGR) at various levels of government. The following are the major resolutions made at the meeting:
- All tax authorities should ensure that high net worth individuals pay their tax as and when due
- Automation of tax administration processes should be given priority to cover all aspects of taxation at both federal and state levels
- Tax potentials from the informal sector should be explored in order to meet government's goal of growing IGR
- Deduction of Value Added Tax and Withholding Tax at source should be implemented at the state and federal ministries, departments and agencies, by automating the process to enhance efficiency and boost collection of taxes
- JTB co-opted members should discharge
their statutory functions in a manner that assists tax revenue
generation. This could be in the following ways:
- Nigeria Immigration Service making it mandatory for presentation of Tax Clearance Certificate (TCC) for issuance of immigration facilities
- Federal Road Safety Corps, Vehicles Inspection Officers and other traffic agencies enforcing presentation of Taxpayer Identification Number (TIN) as requirement for the resolution of a road traffic offence
- State Internal Revenue Services should make presentation of TCC a requirement for processing of drivers' license and number plates
- Tax authorities should intensify
efforts in training and capacity building programmes for its staff
to enhance efficiency
State tax authorities should encourage cashless payment and automation of tax process as a mean of checking leakages in the system
- Whilst these decisions give an indication of the strategic thinking of the JTB at improving tax revenue generation, the ideas behind them are not entirely new.
Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient/effective tax system. Thus, the challenge with optimal tax collection has not been about developing strategic ideas but implementing these ideas. However, it is clear that the sharp drop in oil revenue and the need for government to fund its budget from tax (non-oil) revenue is a major driver for the implementation of these strategies. As governments at all levels are getting more aggressive on taxation, there is the need for companies and individuals to be fully compliant with the tax laws.
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