The President, West African Union of Tax Institutes, Kunle Quadri, argues that one of the ways to make Nigerians comply with the payment of taxes is to employ the indirect method of taxation. He spoke to Okechukwu Nnodim



Why is it that many Nigerians always try to avoid paying taxes?

I think the issue is that there is a very low level of education on tax issues in Nigeria, and there is also less than the required level of tax awareness within the system. And when the government has not really sensitised the system by making the people know the importance as to why they are expected to pay tax, where they should pay it to, and how they should go about the payment of their tax, we’re still going to be having that low level of income generated from the payment of tax. And not just that, the number of people who comply with the payment will still be at a low level following the low awareness in the country. But then, the main issue is moving away from direct taxation into indirect taxation, for that is just the best way you can catch all those who are avoiding tax payment.

Would you mind explaining how indirect taxation works?

In this sense, it means a lot of people will be paying by consumption. This means that more people will be paying their taxes by consumption. If you go to other civilised countries, you will find Value Added Tax rate, excise rate going high and personal income tax rate and company income tax rate going low because they want people to be actually charged with the right tax. You cannot expect people who fill tax forms to fill in the right data, especially when you don’t have the right means to check if they are truly complying with the tax laws as regards those data.

So, you need to devise a way of bringing them to the tax paying net, otherwise we will still continue to have a low level of tax compliance in this country. The moment we move away from direct to indirect taxation, I think the government is going to reap the huge benefits from the payment of taxes. It is important to mention that taxation remains the only way we can have the much anticipated development that we need in this country. But another fact is that people will always ask questions about what their money has been used for and that is why accountability as pertaining the taxes paid already is vital.

How can the masses hold the government responsible when it fails to use the taxes paid judiciously?

I think this depends on which government and which state you are talking about; for some governments are really trying. And in actual sense, they have been using some of the revenues collected, not just tax, to work for their masses. But then, this still depends on the citizens themselves. You cannot remain docile and expect development to come. If you approach, or if possible, confront your government on the best direction that you want them to go, then one way or the other, the government will have to respond to you, especially when you prove to them that you are serious and your requests are genuine.

People complain of being over-taxed by both the federal and state governments, what would you say about this?

Let me just say there are a lot of misrepresentations as pertaining the constituted tradition, and this is because quite a lot of people are not really enlightened on what should be regarded as tax, apart from the fact that the union has to take decisions as part of what is happening in tax. This is with respect as to what should be referred to as a charge, or as a fee because some people nowadays even when they are being given a fine, they refer to it as tax.

So, these are issues that people at times tend to call tax or say that they are being taxed unreasonably and they say we don’t have affordable taxation system. We should try to look at what constitutes a charge; when a government is requesting for your tax, then they are going to provide you with the specific amount required, and after that, it is an obligation to pay based on your income.

Talking about multiple taxation, I think it stems from the fact that a lot of governments want to make money very fast from taxes. But what we are telling them in this situation is that in the long run they will fail, because they will be discouraging the investors and sending them away. We have been advising the investors or the taxpayers that they should go ahead and take up tax consultants and commissioners, who would advise them on how to go about their tax payments.

How would you rate the recently appointed executive the members of the Chartered Institute of Taxation of Nigeria in terms of ability to deliver?

They (CITN executives) have been able to come up with some of the programmes that they will implement and I think in the next one year, we should be able to witness a reform in the right direction as far as they have promised.

How do you support governments of member nations on tax issues?

This union was formed by the Chartered Institute of Taxation of Nigeria and the Chartered Institute of Taxation of Ghana, in collaboration with revenue agencies in the West African region, in order to have a forum for technical and educational development, information sharing and enhancement of tax practice and administration.

Our objectives include the development and enhancement of taxation profession in West Africa, as well as promoting the development of common technical and educational guidelines, professional ethics and standards in member-bodies. We also act as a centre for the development and dissemination of information concerning taxation standards and practices in the region.

WAUTI provides encouragement for and assistance with the formation and development of national taxation bodies and we cooperate with International Tax Directors’ Forum, as much as possible, in its programme of activities.

We collaborate with regional organisations, international bodies and agencies in the development and promotion of the taxation profession within the sub-region and we ensure the provision of adequate forum for the professional development of member-bodies through seminars, symposiums, congresses and interchange of ideas and experiences

http://www.punchng.com/index.php?option=com_k2&view=item&id=2759%3Aindirect-taxation-will-make-nigerians-comply-with-tax-payments-president-wafrica-tax-institute&Itemid=543

An excellent idea but accountability and transparency must come hand in hand with it as well.

Utter nonsense

In civilised countries where taxes are taken the govts have to provide such things as healthcare, education, welfare in exchange for taxing people.

What on earth do Nigerian politicians provide apart from 'lessons in looting'?

GEJ is the biggest 419 artists Nigeria has ever seen - when he was campaigning for president he never mentioned all these things.

Within 1 year he wants to see all Nigerians in the 'Gutter'.

Now Nigerians are faced with at least another 3 1/2 years of relentless extortion.

I hope he is taken out very soon - Let it be MEND, BOKO or even SAMBO - and then let some 'Northerner' return to the 'Hot Seat'.

Rubbish!!! gabbage!!!! from someone who should know better!
Indirect tax system is not equitable, it make low income earners pay more tax! and talking about developed countries I wonder if he has ever lived abroad before or he just decided to formulate what he thinks operate abroad in a very very ignorant statement. In most developed countries any rise in VAT is usually challenged and even if it goes ahead there are always provisions to compensate low income earners in form of tax credits etc

The Nigerian government should put their house in other by making use of appropriate computer software to keep records of all tax payers, give National insurance or Social security numbers to everyone to monitor their earnings and to also enable them identify the unemployed and low income earners. They shouldn't resort to lazy methods of indirect taxation to tax already overtaxed Nigerians on low income.