Leverage tax to boost economy, accounting firm tells govt

From Abubakar Yunusa ABUJA

Stransact (Chartered Accountants), the correspondent firm of RSM, a global accounting and auditing firm in the world, has recommended tax related reforms for the government to improve and sustain the economy.
During a media briefing, the firm’s partners set agenda on tax reforms for the incoming administration, ahead of May 29 inauguration of President-elect of Nigeria, Bola Tinubu.
Stransact Partners noted that the middle class in Nigeria was fast disappearing due to the collapse and relocation of companies that would have employed skilled and educated workforce.
According to the partners, Nigeria had one of the highest multiplicities of tax in the world. With inflation rate rising to 22.04 per cent in March, the multiple taxes imposed on businesses and individuals had become a heavy burden on Nigerians and had become impediments to the ease of doing business.
They advised the government to widen the tax net by bringing in more people from the informal sector into the tax bracket, rather than increasing tax rates or introducing new forms of taxes.
“To ease pressure on genuine businesses bringing investments into the country and ensure compliance, government must be fair and concise in regulation, allowing market forces to freely set the terms for a healthy competition in the economy,” General Partner at Stransact, Eben Joels, said.
Joels also noted that the multiple currency rates policy was giving influential people undue advantage to make excess profit while stifling the growth of genuine businesses.
“For instance, a politician can use his influence to get dollars at the official rate of N460 and sell at the black-market rate of around N750, taking advantage of the arbitrage difference,whereas a fully compliant business person may find it challenging to recoup their investments because they are required to purchase dollars at the open market rate, which is not stable enough to ensure consistent profits”
Partner, Tax Services, Victor Athe, called for the ‘formalisation’ of the informal sector of the Nigerian economy, where a large portion of transactions were done outside the banking system.
“Introducing facilities and regulations that will formalise the unregulated sectors of the economy will widen the tax net and increase the tax revenue available for government,” Athe said.
The partners canvassed for the deployment of homegrown innovations, technologies and tailored solutions to Nigeria’s tax problems.
One example of such indigenous innovations, the partners noted, was the TaxPro-Max introduced by the Federal Inland Revenue Services, which enabled seamless registration, filing, payment of taxes and automatic credit of withholding tax.