President Muhammadu Buhari has broken his silence on tax administration in Nigeria, saying the 2021 Finance Act empowers the Federal Inland Revenue Service FIRS as the sole authority to administer tax for the Federal Government.
Buhari who spoke at the second National Tax Dialogue Week, in Abuja on Tuesday, said the clarification became necessary to avoid taxpayers being burdened with multiple tax compliance obligations towards different agencies of the same government.
Recall that the FIRS and Rivers State government have been engaged in a battle of wits over tax collection at the state level.
Buhari used the forum to restate his administration’s commitment to an efficient tax administration to improve tax revenue in the country.
He insisted that a situation where the current tax system in the country, characterised by fragmented administration, multiple and sometimes, overlapping taxes may not augur well for the system.
He said, ‘In most tax-efficient nations, tax administrative processes and practices are harmonised within a single system.
”One key deliverable of this year’s tax dialogue is to promote synergy in tax administration among the different tiers of government.
”Harmonising taxpayer-identification across the country is a good start but we must do more to promote ease of doing business (including ease of tax compliance) in Nigeria.
”On our part, we have started by clarifying in the 2021 Finance Act that FIRS is the sole authority to administer tax for the Federal Government.
”This clarification became necessary in order to avoid taxpayers being burdened with multiple tax compliance obligations towards different agencies of the same government.
”Multiplicity of tax administration is as undesirable as a multiplicity of taxes; it creates uncertainty and instability; and above all, it is inefficient,” the President said at the Dialogue themed ”Tax Harmonisation for Enhanced Revenue Generation.’’
The President also expressed concerns over the dwindling revenues from commodities, insisting that there is an urgent need to maximise domestic revenue within the extant tax policy and laws.
In his opinion, improved tax revenue for the country which will not necessarily impose new tax rates on Nigerians was now necessary.
”We all know that good intention are not enough as they simply cannot pay for infrastructure, security or social amenities. We must therefore improve tax revenue without necessarily raising new taxes.
”Revenue from commodities, including crude oil, are too volatile and unreliable. Therefore, I pledge the government’s support for any viable initiative for improving tax revenue that should emanate from this dialogue,’’ he said.