Corporate organizations’ concerns that the Federal Inland Revenue Service’s (FIRS) intention to raise the country’s tax-to-GDP ratio to 18% from 10.86% may result in a rise in taxes have been allayed by interim FIRS chairman Zacch Adedeji.
The President Bola Tinubu-led administration is committed to fostering a climate where businesses can thrive, according to Adedeji, therefore this determination won’t always result in tax increases or the introduction of new levies.
In the next three years, the FIRS chairman promised, the organization will increase its tax-to-GDP ratio by 8%, surpassing Africa’s average of 16.5% without strangling investment or economic growth.
Corporate entities had whispered worries that the decision would lead to an increase in tax rates or the introduction of new ones.
Adedeji stated, “Our belief, understanding, and vision as a revenue-generating agency is not to introduce any new tax as we only want to use data to improve compliance.” Adedeji was speaking to representatives of top major tax-paying corporations at a gathering on Wednesday at the Four Points by Sheraton in Lagos.
He described the FIRS chairman as adding that the invited companies and those willing to carry out their tax obligations willingly have nothing to fear in a statement made by his Special Adviser on Media and Communication, Dare Adekanmbi, on Thursday.
“Our strategy is easy. To increase tax revenue, we only want to tax prosperity; we don’t want to tax poverty.
Therefore, it is not in our best interests to cut down fruit-bearing trees. My first ‘love letter’ to you is a thank you for all you have done. Consequently, you have nothing to be afraid about.
“We won’t seek to recover what is not owed to us. However, we do not want anyone to underpay us. Our strategy is fair engagement. You can be confident that the objective of 18% tax as a percentage of GDP will not result in higher taxes.
“If you have been listening to Mr. Taiwo Oyedele, who is the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, you will have known that part of the mandate of the committee is to reduce the number of taxes,” the speaker stated.
He claims that the goal of the interactions with the businesses is to incorporate their suggestions into the strategic action plan being developed to solve issues impeding the collection of tax revenue.
He praised the invited businesses for their high level of responsibility and urged them to keep carefully fulfilling their tax obligations.
“I must also express my appreciation for your dedication to upholding high levels of tax compliance and good corporate citizenship, which distinguishes you as the top taxpayers in Nigeria.
“This is exactly in line with our goal of utilizing voluntary compliance to make taxes the center of national development. Your various industries are crucial in determining the economic and fiscal stability of the country as well as in providing significant tax money for the government.
“We are aware of the difficulties businesses in Nigeria are currently encountering as a result of ongoing changes to boost economic performance. To reach our greatest potential as a nation, we must make these difficult but necessary decisions, he stated.
The chairman committed to resolve the issues brought up while replying to some of the concerns voiced by representatives of the companies, such as the multitude of taxes and duplication of tax oversight on corporate organizations.
Some of the companies at the event included Nestlé Nigeria Plc, ExxonMobil, Shell, Guinness, Nigerian Breweries Plc, Flour Mills, Dangote Group, MTN, British American Tobacco company, First Bank, Access Bank, Guaranty Trust Bank, Zenith Bank Plc, KC Gaming Limited (Bet9ja), Airtel, Seplat, BUA Cement, Nigeria Liquified Natural Gas, NNPC Limited and others.