A tax expert, Asiwaju Tele Ogunjobi FCA, has advocated the deployment of technology for tax management as a vital tool for business growth in Nigeria.
Ogunjobi made the call on Thursday, 17th March, 2022, at a workshop organized by Bradley Professional Services, a financial management and tax consulting firm.
Great Achiever Magazine reports that the workshop, titled Taxreel 2022, with the theme; "Re-thinking Revenue Dwindling and Unpredictable Economic Headwind: Pitching at Macro Level on Finance Act 2021", was held at Sheraton Hotel, Lagos, and had in attendance tax consultants, representatives of multinational companies, government agencies, organized private sectors and other stakeholders.
In his welcome address, the Managing Partner of Bradley Professional Services, Asiwaju Tele Ogunjobi, said the workshop was structured to help companies in the repositioning for maximum tax benefits embedded in the tax law most especially in the current regime of aggressive revenue drive as reflected in the recently released Finance Act 2021.
He disclosed that as Chief Executive Officers, Managers and Executives in finance or non-finance roles, participants will learn and gain insights on ways to successfully navigate through the tax regime for efficient tax planning.
Ogunjobi said the workshop would stimulate awareness, broaden the understanding of taxpayers about the anticipated challenges, while highlighting the opportunities and bring to fore the variables and worries of taxpayers.
In his response to questions, comments and discussions by participants at the workshop, Ogunjobi admitted that the Nigerian economy faced the challenges of COVID-19 pandemic and uncertainty brought about by unstable geo-politics on the global economy, which he said undoubtedly impacted negatively on the Nigerian revenue as evident in the 2022 Appropriation Bill, with the budget expenditure of N17.126trn against expected revenue of N10.74trn, thereby resulting in budget deficit of N6.386trn.
Tele Ogunjobi, who observed that the tide is turning, revenue is dwindling and the avenue for cutbacks in budget is becoming more impossible, recommended that taxpayers must equally shift with the tide by Digitalisation of tax management; paying more attention to tax accounting and tax planning; management of offshore/inter-company financial transactions; sustainability through domestication of operation and procurements.
He advised that, coping with the changes effected through the Finance Act 2021, taxpayers should not primarily focus on adding value through hard-line tax planning that includes managing cash taxes and tax earnings, but rather, they should focus on operational aspect of their businesses which will address knowledge drought; low motivation among human capital resources; continual improvement of internal control processes; inefficient data/records and IT-enabled system.
Ogunjobi also called for reduction in multiplicity of taxes, elimination of policy conflicts inherent in the Finance Act 2021 to enable taxpayers see the pursuit of increase in tax revenue by government as fiscal policy that will boost the economy and not to de-spirit taxpayers, which will eventually be a win-win for taxpayers and government.
Several papers were presented by seasoned tax experts at the workshop.
In his paper titled, "The Rudiments of Finance Act 2021 and the Impacts on Company Finance vis-a-vis the Economic Realities", Mr Taiwo Okunade; (Lead Partner Transfer Pricing in Deloitte, West Africa), said Finance Act is used to make pronouncement by government to dictate the direction of the economy which includes the changes to be effected and what the government intends to achieve.
Okunade said the objectives of Finance Act 2021 cover five different areas which are: Mobilisation of domestic revenue; Reform of tax administration and legislative framework; Broadening Nigeria's revenue take from international taxation; Reform of financial sector and promoting tax equity; and reform of public financial management.
He called for widening of the revenue base in order to include areas that are yet to be captured in the tax net, particularly international tax.
Okunade affirmed the supremacy of Federal Inland Revenue Services over other agencies of government in revenue collection, adding that tax law should not be static, but must change in line with current realities.
The Chairman, Lagos State Internal Revenue Service (LIRS), Mr. Ayodele Subair, ably represented by Mr. Tokunbo Akande, Special Adviser to LIRS Chairman, in his paper titled, "The Growth of Tax Revenue in a Digital and New Normal Economy Through the Enablement of the Finance Act 2021", said the advent of COVID-19 caused many disruptions to workability of companies across the world including Nigeria, thereby crippling their economies.
He said it was a new normal for companies to conduct their businesses in line with the adjustment required by COVID-19, which invariably necessitated the need for government to expand its tax net through the taxation of Non-Resident Companies (NRC) that provide digital services to Nigeria.
He disclosed that Section 30 of the Companies Income Tax Act gives the Federal Inland Revenue Service the power to assess NRCs that provide digital services to Nigerian companies on the basis of fair and reasonable percentage on their turnover.
He noted that Digital Sales Tax (DST) was successful in countries like India, Kenya and others which legislated new Digital Sales Tax, believing that DST will contribute immensely to the overall expected tax revenue of Nigeria.
In another paper titled, "Rethinking Dwindling Revenue and Unpredictable Economic Headwind: Pitching at Macro Level on Finance Act 2021", Mr. Olufemi Oluwaniyi, a retired Coordinating Director at FIRS, noted that the unpredictable economic headwind caused several setbacks in operations of many businesses, ranging from high cost of operations, business downsizing and outright foreclosure and relocation of companies elsewhere, noting that these factors reduced the revenue that ought to accrue to federal government.
He said as a way of addressing the dwindling revenue, the provision of Finance Act 2021 empowers FIRS to collect 0.005% of the net profit of companies that are operating businesses in Nigeria as levy to the Police Trust Fund, collection of the National Agency for Science and Engineering Infrastructure (NASENI) levy of 0.25% of profit before tax on companies, increase in the rate of education tax from 2% to 2.5% for companies registered in Nigeria, appointment of VAT agent on behalf of NRC that supplies taxable goods and services to Nigeria to collect and remit VAT to the service.
He disclosed the penalty for taxpayers that refuse to grant access to FIRS to deploy technology in the taxpayers' system, penalty on banks that fail to submit quarterly bank returns, among others.
However, Oluwaniyi observed that the changes to the Nigerian Tax Law through the Finance Act 2021 might be seen as a serious burden on taxpayers despite the harsh economic conditions, which obviously is a threat to the tax principle of equity and fairness.
He pointed out that increased revenue could still be achieved by deploying energy to widen the revenue base and plugging leakages rather than by way of new taxes or increasing rates.
In a closing remarks, the Managing Partner of Bradley Professional Services, Tele Ogunjobi, urged tax experts to build capacity to move with trends in tax administration, tax practice and revenue collection, adding that the tide is changing.
Ogunjobi also commended the resource persons who delivered several papers for their highly impactful and thorough presentations which were of immense benefits to the participants.
Some of the participants who spoke to Great Achiever Magazine expressed joy and satisfaction at the high level of professionalism demonstrated by the resource persons, as well as the interactive nature of the workshop.
The participants, who were presented with certificates of attendance at the end of the workshop, commended the organizer of the workshop for the learning opportunity, while urging the organizer to make the workshop a yearly event.
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