Tax Revenue is the Most Sustainable Way to Run an Economy, CITN President

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By Olusegun Obisanya

The President/Chairman of Council, Chartered Institute of Taxation of Nigeria (CITN), Barr. Samuel Agbeluyi has maintained that there will not be meaningful development in an economy that is not tax compliance because that is where government generate revenue to run and carry out social programmes that directly impact citizenry.
He spoke yesterday at the second Pre-Conference Presidential Chat heralding the annual tax conference billed to take place in the FCT, Abuja from Monday, May 13 to Friday, May 17.
The new venue for the 26th tax conference will hold at the Abuja Chamber of Commerce and Industry, International Trade and Convention Centre, Km 8, Yar’adua Expressway, Abuja.
Agbeluyi posited, “We’ve told them that it will never work for Nigeria to rely on oil revenue because running a dynamic and a very big country like Nigeria on a mono product revenue won’t work. Of course, the revenue was coming as at that time. But the reality has dawned on the nation. I think we have the benefit of getting it right this time around.
“When President Tinubu came to office, one of the first statements he made had to do with taxation. That is to tell you the man was prepared for the job. You can’t be using above ninety percent of your revenue to pay debt, which was happening before he came on board. That means you have no money to even do your recurrent let alone the capital expenditure.”
He added, “So, we’ve always been advocating that tax revenue is the most sustainable way of running any government. This is the practice anywhere across the world. The top ten economies and you can check the statistics, most of the successful economy in the world are not natural resource base economy. They use tax to finance their activities and it is sustainable.”
Agbeluyi stressed that tax collection enables government cater for social needs of the citizenry.
He said, “Whatever revenue is collected from the populace is used by the government to take care of their medical, security, education needs and other social activities on behalf of the people. The President has said unequivocally that he wanted the taxes that will be collected to be under unit. That is maximum nine or at worst scenario ten.
He continued, “How do you manage collection of 60 or 65 different type of taxes. Unfortunately, these nine contribute about 90 percent of the revenue. So, why waste time on these 64 that are burden to the public. These are the parts of the advocacy of this Institute, we didn’t just start today.
He urged tax authorities to be faithful in the use of people’s money.
“Again, we are saying this to political leaders, you can’t collect tax revenue from people and you don’t use it religiously. You are only weakening the system. If you want to enhance the system, whatever you collect, let it be seen that you are using it for the good of the people. Once we have that, a culture will be created.”
According to CITN president said companies benefiting from tax holiday must be strategically relevant to the economy and abuse of it must be avoided as it is against the principle and practice of taxation.
He said, “Tax holiday is an incentive. Taxation is not all about collection of revenue, it’s not all about payment, it is an instrument of redistribution of wealth control the economy in a particular way you want. So, revenue collection is just an arm, a segment of taxation. The other aspect is giving tax holiday or window to some companies and that company must be strategically important to developmental programme of the country.
“If you know that given them tax holiday will give them a kind of reprieve, it is in the best interest of the country to do that. After all, after the period of tax holiday, they will still be back, they will be strong and better to pay a lot of money. Meanwhile, while enjoying the tax holiday, they are improving the economy of the country.
“That’s why we say in CITN, economy is of important to taxation, just as law is important. As a tax professional, you must have your focus on the economic base of the country. So, if you are convinced and you are not doing it on political or family patronage, tax holiday is good for any society.”