The Federal Government has begun a probe into 800,000 registered companies in the country over non-payment of tax.
Kemi Adeosun, minister of finance, said this in an article she wrote and circulated to the media.
According to her “over 800,000 companies, including some government contractors that have never paid taxes, have already been identified and are being audited.” She added the finance ministry had commenced “a database project that combines data from the various arms of government, including bank records, property and company ownership, and Customs records to create accurate profiles of those liable to pay taxes. The ministry has also placed one of the world’s premier private investigation agencies on retainership to trace overseas assets.”
Adeosun lamented tax evasion by businesses and individuals. She said: “A cursory look at the effective tax rates paid by the huge multinational and local operators, as well as the data on illicit financial flows, indicates a pattern of systematic tax evasion at all levels. Recent statistics released by the Federal Ministry of Finance showed that Nigeria has just 14 million active taxpayers from an economically active base of 70 million. Over 95 percent of these are salary earners in the formal sector, just 241 persons paid personal income taxes of N20m (US$65,573.77) in 2016.
“Taxing the high net-worth and Nigeria’s huge community of entrepreneurs constitutes a critical but yet attainable target. The statistics for corporate tax payment shows the debilitating effects of base erosion and profit shifting as well as abuse of an overly generous tax incentive and duty waiver system. The historical government apathy towards revenue mobilisation is one of the effects of the mistaken identity that saw Nigeria perceive itself as an oil economy. This administration is determined to correct this identity crisis and all its concomitant effects.”
Moreover, the minister stressed the nine-month tax amnesty allowed individuals and organisations to voluntary declare their assets without prosecution global practice to tackle tax evasion.
“This amnesty follows successful initiatives in a number of countries, where tax evasion is a problem, such as Indonesia, Argentina, South Africa and India. It has been programmed to end just as the Automatic Exchange of Information, which will provide Nigerian tax authorities with unprecedented levels of information on offshore assets, becomes effective.
“The initial signs suggest that Nigerians are responding positively to the new revenue narrative. Despite the emergence from a recession, tax revenues are showing early signs of growth. VAT shows 18.97 percent year on year improvement.”
The minister observed there would be challenges in government’s i tax revenue mobilisation efforts.
“By its nature, tax mobilisation risks the popularity of any government, but the present administration understands that the short-term lure of political expediency must give way to the long-term best interests of Africa’s largest economy,” she said.
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