The National Economic Council (NEC) had a two-day retreat recently with far-reaching decisions. Vice President Osinbajo as Chair of NEC, 36 Governors, some Ministers and heads of relevant government agencies were present. The Retreat was declared opened by President Buhari at the Statehouse Conference Centre on 21 Mar 2016.
At least, 71 proposals were agreed on which they believe will bring the economy back on track. Decisions were taken in many areas of our economic life, covering agriculture, solid minerals, infrastructure and services, employment generation, investment, industrialisation and enabling monetary policies were equally covered. As expected in such a retreat, issues affecting revenue generation and fiscal stability were not left out.
Two committees were set up to turn decisions to actions. A Steering Committee, headed by the Vice President, was set up to implement the proposals. The seconded committed on Implementation monitoring is headed by Zainab Ahmed, Minister of State for Budget & National Planning.
At least, there are ten (10) proposals relating to tax policy, tax management and tax administration, which caught my attention. Here’s a recap of my top ten tax takeaways from the NEC Retreat. These were covered under Revenue Generation & Fiscal Stability & other thematic areas. These are essentially the strategic actions that government will embark up through the revenue agencies. That is the Federal Inland Revenue Services (FIRS) and the various State Boards of Internal Revenue Services (SIRS).
1. Tax Authorities need to INVEST IN RELEVANT TECHNOLOGY to support efforts to improve tax collection.
2. Intensification of TAXPAYER EDUCATION to EXPAND THE TAX BASE and avoid political back-lash from tax collection efforts.
3. Consideration for PROPERTY AND CONSUMPTION TAXES to improve revenues in a fair manner.
4. EXPANSION OF VAT COMPLIANCE LEVEL, with planned gradual INCREASE IN VAT RATE.
5. Tax Authorities to COLLABORATE on initiatives to improve tax collection, including JOINT AUDITS of major corporate taxpayers.
6. Single digit interest rate for agricultural loans, with WAIVER OF DUTIES AND TAXES FOR AGRICULTURAL PRODUCTS & EQUIPMENT.
7. Finalisation of roadmap for Solid Minerals Development, covering amongst others, illegal miner, LICENSES, TAXES AND ROYALTIES.
8. There is a need to develop INCENTIVE SCHEMES for federal and state revenue generating agencies.
9. There’s need to GENERATE RELEVANT DATA on the respective economies of States & Country.
10. Agreement was reached for concerted and consistent efforts to DIVERSIFY REVENUE SOURCES.
All the ten issues captured here are obviously not new to anyone who’s familiar with events in Nigeria. While they may sound rhetoric, we can’t have too much of such. We need to keep the conversation going. Data gathering and taxpayer identification, deployment of technology, taxpayer education/enlightenment, and focus on indirect tax are all relevant focus areas. Collaboration through joint tax audits, fiscal incentives for critical sectors are all worthy of considerations.
What is equally important is the need to be more strategic with our approach at broadening the non-oil tax revenue. We have a National Tax Policy that articulates most of these issues but seems forgotten by many. It is important to move away from having a good policy that is never implemented. When we focus too much on present predicament we live in the moment and forget that tomorrow catches up so soon.
This Retreat must commended for coming up with strategic initiatives on diversifying the economy and blocking revenue leakage. Hopefully, the weight of the current economic reality is heavy enough to turn talkshops to workshops. At least for a change, it is hoped that the two committees will move to action and help actualize the decisions. Let it not be the usual story of having one committee to evaluate the need for another committee. Let the steering committee steer and let the implementation monitoring committee monitor. While the journey ahead looks long, the destination is surely reachable.
As the tax authorities get cracking, taxpayers must begin to evaluate the impact of these decisions on their business. It can no longer be business as usual for tax defaulters and evaders. Focus on enforcing compliance, joint tax audit, deployment of technology, tax registration drive will keep defaulters on their toes. Like we say in my part of the world, the grasshopper that does not hear rests in the stomach of a bird.
Footnote:
This article was posted in verses via my Twitter handle, @YomiOlugbenro, on Wednesday 4 May 2016, during my weekly “tweetax” session with hashtag #TaxWiseNG. The tweets are subsequently posted as article on my blog www.yomiolugbenro.com and my social media accounts – facebook.com/YomiOlugbenro and LinkedIn.com/YomiOlugbenro.
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