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Monday, 24 August 2009

Nigeria: The Country's Tax Administration Bedevilled by Challenges

David Agba

12 August 2009

Abuja — Federal Government on Tuesday declared that despite the achievements recorded, the sector still has a lot of challenges to battle with.

Minister of Finance, Mansur Muhtar, stated this while opening the African Tax Administration Forums' Third Steering Group meeting held in Abuja.

According to him, these include: the high level of tax evasion and avoidance occasioned by ignorance and the perception that government is not accountable.

Obsolete tax laws, which are now being updated, weak and incapacitated tax administration machinery, coupled with inappropriate personnel skill mix.

Muhtar, who was represented by Permanent Secretary in the ministry, Atiku Kido, also pointed out that manual tax administration and unwieldy operational procedure, lack of tax refund machinery in place, among others, were hampering the development of the sector.

The Minister however expressed hope that re-engineering of the human resources function of the FIRS, taxpayer enumeration exercise for the purpose of developing a reliable tax data base in the country, adoption of the integrated tax administration system, among others, were being reviewed and would yield the necessary impetus for tax administration in the country.

He therefore implored participants to bring to bear their wealth of experience and knowledge of taxation by developing workable tax models within the African context.

Muhtar also charged them to strive to attain the levels already reached by the likes of organisation for economic cooperation and development (OECD tax forum), the UN group of experts on international cooperation in tax matters and surpass their feat.

"We can equally decide to look into critical areas like the tax treatments of cross border transactions, thin capitalisation, transfer pricing, value added tax operations and developments in the area of double taxation agreements," he said.

Earlier in her welcome address, Chairman of the Federal Inland Revenue Services (FIRS), Ifueko Omoigui-Okauru, said the meeting was basically for members to consider proposals on development partners, the ATAF project and its inauguration.

"The forum developed out of the need for African tax administrators to maximise domestic savings reserves in order to sustain national development priorities and reduce dependence on foreign aid.

"Associated with this is the risk posed by poverty and inequalities to political stability and democracy in the continent. Hence, the need to improve institutional systems, technical expertise and countrywide co-operation were identified as key practical elements of a strategy to improve efficiency and effectiveness of revenue collection," she said.

The steering group of the Africa Tax Administration Forum (ATAF) was formed in August 2008 in Pretoria, South Africa. Its first meeting was held in Cape Town and the second held in Ghana this year.

Source:Daily Independent

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