Forum seeks effective tax system, expansion of tax net to increase revenue generation

 

Dame Gladys Simplice, the President, Chartered Institute of Taxation of Nigeria (CITN) has called for overhaul of the tax system to address possible remedies to challenges inherent in the system in order to accommodate more active taxpayers into the tax net.

Simplice made the call while delivery welcome address at the 3rd Annual International Academic Conference being organised by the CITN in collaboration with Igbinedion University, Okada.

The theme of the Conference was: “Taxation, Social Contract and Economic Development”

She decried the low percentage of Nigeria population that were captured in the tax net due to inefficiency and lack of harmonisation of the tax system, stressing that only about 13 per cent of Nigeria population were in the tax net, resulting to low revenue generation and collection.

According to her, this low rate of internal revenue collection depresses public finances, hampers the ability to deliver social goods, services and physical infrastructure.

”From available data from the Joint Tax Board, just about 13% of our population are in the tax net. This is not encouraging for any nation that desires to achieve development in the foreseeable future.

“It is agreeable that no nation can achieve development in the absence of adequate revenue to fund its programmes and projects. However, sustainable and adequate revenue mobilization is a function of an effective tax system.

“Unfortunately, on the citizen’s part, the level of tax compliance is abysmally low such that revenues from taxation cannot fund development projects.

“But, if we can ramp up the number of active taxpayers across all sectors, the recurring budget deficits and tendency to borrow to fund the budget will be adequately addressed,” Simplice said.

She, therefore, urged the government to be more committed in transparently accounting for revenues from taxation as there was a glaring trust deficit between the citizens and the government; they do not trust that the government would channel tax revenues for its intended purpose.

She said, “We have seen a consistent failure by successive governments in transparently accounting for revenues and executing programmes and projects that impact on the standard of living of the people. Therefore, both players (government and citizens) in the social contract must play their part for our country to achieve economic development”.

Speaking, Prof. Suleiman Aruwa of Nasarawa State University said that the general theme in tax research was how the necessary tax revenue to support the public sector can be raised in the most efficient and equitable way.

In his paper titled, “Research philosophy and implications for taxation research,” Aruwa said tax research should focused on Income Tax Evasion, Tax Compliance- The Compliance Costs of Taxes on Businesses and Individuals, Economic Effects of the Tax Reform, Labour Supply, Income Taxes and the Incentive to Work among others.

According to him, taxation researchers have a duty to understand the philosophical grounding of research undertakings for it to have economic significance.

He explained that exploratory and mix-method research should be encouraged while attempts should be focused to building pure Taxation theories from existing research questions, hypotheses and models already developed.

Aruwa added that emphasis on statistical significance of research results has minute usefulness in the development of Taxation education, research and practice given its behavioural orientation.

The Chairman, CITN Annual International Academic Conference Organizing Committee, Prof. Kabiru Dandago said the Conference was one of the initiatives of CITN designed to give adequate opportunities to its members and non-members (especially those in the academic), to excel in the area of research and publication as they make reasonable contributions to knowledge in the field of taxation and other related disciplines.

Dandago said that objective for the Conference was to bring together members of the Institute: academics, practitioners, policymakers and students for an exchange of quality ideas, adding that it also targeted to create an avenue for a mentor-mentee relationship through PhD Colloquium, capacity building workshops and other activities of the Conference.

“This Academic Conference perfectly serves as a cost-effective alternative to the CITN members in the academic world as they use it to perfect their research and publication skills, enjoy academic mentoring, earn credit points, and ensure their rapid progress on the academic ladder.

“It will also provide participants with open and scholarly feedback on their works from a global audience and perspective,” he said.