*Says There Is A Mismatch In The Tax System In Nigeria Which
Should Be Addressed
* There Is A Gap In Judges’ Understanding Of Tax Law — Titi
Fowokan
* There Is A Disconnect Between Taxation And Social Contract
Ab-Initio—Gbenga Falana
One of the panelists who spoke during the second plenary session
in the Annual Conference of the NBA Section on Business Law, Titi
Fowokan, has said that cost of doing business in Nigeria is very
high and that they get a much higher returns from their
subsidiaries outside the country than the ones within.
Titi Fowokan made this statement while speaking on “How
Supportive Nigeria has been regarding Tax administration”, giving
her experience on tax administration within the country and out of
the country where other Dangote Subsidiaries are. According to her,
here in Nigeria, we have the Federal, State and Local tax
authorities to deal with, adding that, in many situations, there
have been multiple taxations as their offices in different local
governments in the same state are made to pay similar tax. “Outside
the country, one tax code takes care of all that. There is a
mismatch here and it should be addressed,” she said.
Gbenga Falana, the Senior Tax Manager at Cadbury also shared his
views, relating it with the Cadbury’s experience. He pointed out
that there is a disconnect between taxation and social contract
ab-initio because the tax payer tends to provide their entire
infrastructure with basically nothing coming from the government.
He believes that regular tax payers should be given incentives to
continue to build their loyalty, and there should be clarify in
terms of educating the tax payers on key issues they should
know.
When asked how efficient dispute resolution process has been,
Titi, affirmed that there is an improvement in the Federal Tax but
a bit of issues observed in aligning same with tax authorities.
According to her, they are supposed to discuss with the company
before they carry out an assessment, but that it is not done.
She also believes that lawyers need to understand basic
accounting when it comes to tax dispute resolution, adding that, it
was clear that there is a gap in the availability of advisory
services and that there is a gap in judges’ understanding of the
tax law.
For Falana, FIRS should look into managing the process of tax
dispute resolution as it is not being handled very well. “There is
a great need for educating the tax payer properly; the FIRS also
focuses majorly on revenue generation and in cases where there are
nothing to pay, they tend not to give in just because they have a
target to be met,” he said.
Ike Odume, Director Legal Services, FIRS, while answering the
question on “How the FIRS is helping to create the enabling
environment for businesses”, said that even when a letter of audit
is issued to a business owner, the tax payer has the right to
extend the date by writing back to them for a time that will be
suitable for the company. He mentioned the tax incentives available
like Tax Holiday of up to 5 years, Investment allowance, and also
Tax exemption. The National Tax Policy currently addresses a lot of
the concerns tax payers have and encouraged everyone to acquaint
themselves with it, it was affirmed.
He stressed that VAT in Nigeria is one of the lowest. He noted
that calls were made to increase VAT which was unsuccessful as the
FIRS decided to adopt another approach, increasing the number of
tax payers. According to him, VAIDs was introduced which is a
voluntary means of tax remittance with incentives attached to it
also. He noted that FIRS introduced technology into their
operations, which made it much easier to pay taxes. He also said
that they introduced the e-payment system, processing tax clearance
certificate from the comfort of your home; that they have also
collaborated with banks, the Nigerian Customs and CAC so there
would be ease in handling issues that cuts across these
organizations.
A legal practitioner by the name Eze also responded by saying
that initially VAT tribunal was in place before it was nullified
leading to the establishment of the Tax Appeal Tribunal. He
stressed that the State High Court doesn’t have the jurisdiction to
handle issues bothering on Personal Income Tax and so lawyers must
file suits regarding this to the Tax Appeal Tribunal. He finally
recommended that Taxation lawyers must study its provisions very
well and the process of dispute resolution.
People who made up the panelists are: Titi Fowokan, Head of Tax,
Dangote Group, Mark-Anthony Dike, Member, Tax Appeal Tribunal
Lagos, Gbenga Falana, Senior Tax Manager at Cadbury, and Ike Odume,
Director Legal Services, FIRS, while the session itself was
moderated by Lolade Ososami.
