The Federal Government said it has expanded access to actionable data and it is working with the Organisation for Economic Co-operation and Development (OECD) Global Forum on transparency and exchange of information for tax purposes to ensure that there is no hiding place for tax dodgers.
Zainab Ahmed, Minister of Finance, Budget and National Planning, disclosed this in a statement issued by Yunusa Tanko Abdullahi, her Special Adviser on Media and Communication, on Thursday.
Ahmed, who spoke at the National Tax Dialogue held in Abuja, said do the government will continue to do its best to cater for Nigerians in the face of daunting economic circumstances.
She noted that the COVID-19 pandemic has complicated a lot of issues leading to, among other things, cyclical economic crises.
“There is significant fall in crude oil prices resulting into very huge funding gap for the government. This trend is projected to continue into 2021 (hopefully, not beyond) as the pandemic continues to disrupt economic activities globally.
“The lockdowns of 2020 and the associated reduction in economic activities during those periods are expected to bear negatively on companies’ 2021 taxable profits. The extent of revenue decline from corporate income tax may not be known until 30th June 2021 when most companies would have filed their tax returns for the year,” she said.
Drawing attention to the need for understanding the rationale behind government policy measures, Ahmed urged that the rationale behind some of the policy measures adopted by government in response to the impact of COVID-19 are better understood within the context of the peculiar economic situation facing the country.
She also called on the citizens to perform their basic civic obligation by paying their taxes correctly and promptly.
“For instance, in 2019, the government exempted small companies from tax while reducing tax rate for medium companies. This year, the government, as a way of helping workers remunerated at the lower-rung of the wage ladder, exempted minimum wage from income tax and further reduced the rate of minimum tax for businesses. The government deliberately took the decision not to impose new taxes, notwithstanding the pressing need for increased revenue,” she said.
The minister added: “We are committed to deploying technology to make tax payment and tax administration easier and more efficient. We are also reforming tax refund processes, collection of value added tax (VAT) on cross-border transactions and putting measures in place to block revenue leakages.”
Ahmed stated that the recent launch of the system for automatic exchange of financial information is a key step in ensuring tax compliance.
“Accordingly, everyone (taxpayers, tax practitioners, lawyers and indeed, every well-meaning Nigerian) is called upon to join hands with government to reposition the economy and provide better living conditions for our populace. To this end, tax compliance must be taken as a duty for building our nation,” she said.
Speaking on the efforts of the government to enhance taxation, Ahmed said: “We are continuing our efforts to monitor and enhance taxation of MNEs which are doing business in Nigeria. We introduced the concept of Significant Economic Presence (SEP) into our domestic legislation last year as a starting point for the taxation of income generated from Nigeria via digital or online platforms. This year, we will continue our work with the OECD inclusive framework to stop base erosion and profit shifting.”