Tax management: Look up to Nigerian hills

A report the other day that the Federal Government has resorted to requesting the International Monetary Fund (IMF) and the Group 24 (G24) countries for assistance in “identifying assets of Nigerians overseas and of International Oil Companies (IOCs) doing business in the country (Nigeria) for proper inventory for the purpose of effective taxation” is curious and unnecessary.

No doubt, amidst dwindling revenue, increasing budget deficit, debt profile, demand for development of essential infrastructure as well as other pressing nation’s needs, the Federal Government appears to be under some undue pressure in seeking ways of enhancing its revenue profile.

Thus, attention is increasingly being directed towards taxation of individuals and corporate organisations in the economy.

Evidence for this includes government’s broadening and deepening of tax dragnet and base, persistent call on taxable persons to pay their taxes and the amnesty period granted for voluntary tax payments.

Basically, these are part of government’s normal business and should not raise any eyebrows at any time.

Despite this enthusiasm, however, there is still a huge gap between what the government has been generating as revenue and the demands that need to be met.

It is perhaps against this background that a report that the Federal Government’s request to the International Monetary Fund (IMF) and the Group 24 (G24) countries for assistance in “identifying assets of Nigerians overseas and of International Oil Companies (IOCs) doing business in the country (Nigeria) for proper inventory, for the purpose of effective taxation” may be situated.

According to the report, Mrs. Zainab Ahmed, the minister of Finance, made the request at a closed-door meeting of G24, which took place on the sidelines of the IMF/World Bank (WB) meetings in Bali, Indonesia.

Mrs. Ahmed was reported to have stated that the Federal Government was “assiduously working towards fashioning out strategies that would help improve the country’s tax revenue, especially from international oil companies (IOCs).”

Unfortunately, the report did not provide what, if any, the minister must have shared as the response she got from the IMF/G24. Such a response would have assisted in gauging the impression of the bodies on Nigeria’s request.

However, the Nigerian government ought to have an inventory of its citizens overseas. It will be more than a pity, if it does not. The government may not know the assets of Nigerians doing business overseas.

But if the asset owners have paid taxes to the governments where they acquired the assets, need Nigerian government tax them again? Will that not amount to double taxation,which is what most businesses in the country have been complaining about? And what will be the rationale and justification for such tax?

As for the IOCs, they are operating in the country. It is curiously embarrassing that government is seeking external bodies to help to develop instruments with which to tax them.

While it may sometimes be exigent for the country to seek help when and where there is a need, the minister’s request raises serious questions, among which are: Have the IOCs not been taxed since they became taxable many years ago? If they have been, what instruments have been used? If they have not been taxed, why? Are Nigerian tax officials (professionals, practitioners and consultants) incapable of developing the tax instrument(s) under request?

Furthermore, if government is truly assiduous in “fashioning out strategies that would help improve the country’s tax revenue, especially from the IOCs,” what has it done in that regard internally and what has been the outcome? Before resorting to an open global platform, what countries has the government sought assistance from privately and what was the outcome? Why was it important or necessary that such a request should be tabled at a global forum?

That request by Mrs. Ahmed has distasteful implications. One is that Nigeria is incapable of developing appropriate instruments for the taxation of IOCs.

The other consequence is that it has painted Nigeria and its tax officials in bad light in the comity of nations.

Third, it suggests that no value has been earned from all the courses, seminars, conferences and other forms of training that Nigerian tax officials (public and private) had participated in over the years.

Fourth, the minister’s request questions not only the existence but also the credibility of the Chartered Institute of Taxation of Nigeria (CITN) and other tax relevant bodies in the country.

It is high time government guided against utterances, steps and actions that give wrong signal to the world about the capacity and capability of Nigerian citizens (domestic and overseas) to manage and resolve national issues of concern.

We have tertiary institutions (universities and polytechnics) teaching and researching in various disciplines including taxation. We also have professional bodies in various fields of human endeavour.

Resolving national challenges, should first be brought to the attention of individuals and bodies where competences and expertise abound for solutions prior to help being sought from overseas’ institutions and countries.

A great number of this country’s citizens are not just proving their worth overseas but they are also being recognised and celebrated – in all fields of human endeavours.

Mrs. Ahmed and other government functionaries should learn to table national challenges, whatever they may be, for resolution, with Nigerians and relevant institutions that have the competence and expertise.

It should be only where there are proven cases of lack of resourceful Nigerians to successfully deal with identified issues that help can justifiably be sought elsewhere. Certainly, we should not wash our linen in the public even if they are not dirty.

Therefore, there should be more critical challenges to be taken to an open global forum than ordinary tax administration as was the case at the just concluded meeting of IMF/G24.

Nigeria does not deserve that kind of odium. Apart from giving Nigerian professional bodies opportunities to prove themselves, they also deserve good measure of respect from the government of the country that hardly consults with or patronize them.

In the main, what is the purpose of tertiary education to a country if faculties of various disciplines therein cannot be made to address contemporary challenges? Governments at all levels should learn to look up to the hills of tertiary education institutions within their country where contemporary challenges can be studied and solved.

If curricula of studies are not good enough, they should be reformed.

Global bodies are not there to solve basic problems such as tax administration for countries that have a lot of tertiary institutions offering accounting, business and management education.