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Update: Buhari Issues Strong Warning To government Officials, What He Said

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Buhari has issued strong warning to government officials.

OnyxNews Nigeria reports that the Nigerian President, Muhammadu Buhari on Thursday in Abuja directed the Federal Inland Revenue Services (FIRS) and related government agencies to plug all revenue leakages by ensuring strict compliance of tax payments by foreign companies operating in Nigeria, urging the deployment of more digital platforms and seamless connections.

The president speaking virtually, at the First National Tax Dialogue held at the Conference Hall of the State House, ordered all government agencies to automate operations and ensure more synergy in advancing the interest of the nation in revenue generation.

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It is not enough that our citizens and local businesses pay their fair share of taxes. Equally, foreign businesses must also not be allowed to continue to exploit our markets and economy without paying appropriate taxes.

Accordingly, the FIRS has my mandate to speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all their ramifications and generally automate its tax processes.

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In line with this, I have directed all government agencies and business enterprises to grant FIRS access to their systems for seamless connection. FIRS must ensure that its deployment of technology for automation is done in line with international best practices. In particular, FIRS can borrow a leaf from other countries which have successfully automated their tax processes.’’

The president said Nigeria will continue to work with the Inclusive Framework (on equal footing) to develop internationally acceptable rules for taxation of the digital economy, while hoping that “the Inclusive Framework would have evolved into an acceptable multilateral solution that will comprehensively address the tax challenges of the digitalised economy by the middle of 2021.’’

President Buhari assured citizens that the government will continue to pursue its mandate of improving lives through investments in infrastructural projects like railways, roads, electricity, healthcare and education, in spite of dwindling revenues and the challenge of coronavirus.

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Our government has continued to pursue all those projects despite massive decline in government revenues occasioned by a combination of factors among which is the COVID-19 pandemic.

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The devastating effect of COVID-19 on the health and economy of the world is evident across every strata of our society. It is obvious to every citizen of this country that our economy is not immune from the global economic downturn. As such, we have had to confront the conflicting situations of reflating the economy and at the same time raising revenue to meet our budgetary needs. It is within this context that the government undertook an expansive budgetary projection of over N13 trillion for 2021.’’

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The president said the government had “inevitably resorted to deficit budgeting as a result of declining revenues for some years,’’ resulting to increase in Nigeria’s debt profile.

As we might expect, this has led to increase in Nigeria’s debt profile which stood at about N32 trillion in September 2020. This funding gap created by the dwindling government revenue, therefore, underscores the importance of the national tax dialogue we are holding today.

No nation has ever made progress without having to pay for it or make the necessary sacrifice. I, therefore, call on all Nigerians to be alive to their tax obligations. This government is strategically restructuring the tax revenue mix in favour of indirect taxes in accordance with our national tax policy document. To this end, FIRS is mandated to do all that is required in order to efficiently collect tax revenue due from transactions carried out using local and foreign online platforms. The government has made relevant statutory amendment to tax laws in the Finance Act 2020.’’

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While urging all citizens to play more active roles in nation building by paying their taxes, the president said “the administration is, however, not seeking to increase the tax burden upon the citizens but to plug the existing tax loopholes or leakages and to ensure even and equitable application of the tax laws.’’

According to him, “this was clearly demonstrated by the provisions in the Finance Act 2019 whereby government exempted small companies from tax and reduced the income tax rate for medium companies from 30% to 20%. In the Finance Act 2020 which I signed into law at the tail end of 2020, we went further to cushion the burden of tax on the low-wage workers by exempting minimum wage from personal income tax.’’

President Buhari said necessary amendments had been made to the FIRS Establishment Act in the Finance Act 2020 in order to provide the legislative framework for the adoption of technology in tax administration.

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Every Nigerian must see tax payment in its proper context, which is, as a solemn and patriotic obligation that is necessary for building a better society.’’

In his keynote presentation, President of the African Development Bank (AfDB), Akinwunmi Adesina, projected a rebound of the Nigerian economy from recession, with a 1.5 per cent growth rate in 2021, and 2 per cent growth in 2022.

Mr Adesina said taxes should be employed as instruments for promoting development by encouraging private sector companies to take up responsibilities in infrastructure, and attracting Foreign Direct Investments, admonishing that prolonged tax holidays could be counterproductive.

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He said youth should be incentivised to grow businesses with appropriate tax regimes, adding that Africa loses about 60 billion U.S. dollars annually from taxes.

The Minister of Finance, Zainab Ahmed, said the government will improve its template for tax collection, especially in the face of dwindling revenues due to the coronavirus pandemic, describing 2021 as a year of recovery for the economy.

The minister noted that emphasis on tax collection will be shifted from income to spending and all multinational corporations in the country will be required to fully comply with new directives.

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The FIRS Chairman, Muhammad Mamman Nami, called for a new, comprehensive tax payment culture.

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