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65% of registered payers evade tax – Jonathan

By Businessnews Staff on September 11, 2014

President Goodluck Jonathan on Tuesday lamented the huge rate at which corporate businesses and individuals were evading tax in the country, stating that a diagnosis carried out by the Federal Inland Revenue Service revealed that as many as 65 per cent of registered tax payers had not filed their returns in two years.

The President, while speaking at the opening session of the 44th Annual Accountants’ Conference in Abuja, also explained that the diagnosis revealed that 75 per cent of Micro, Small and Medium-scale Enterprises were not in the tax system, while 35 per cent of companies operating under the Pioneer Status Incentive abused their tax exemption status.

The conference, organised by the Institute of Chartered Accountants of Nigeria, is the single largest gathering of chartered accountants in the country.

The theme of this year’s conference was: ‘Protecting the public interest, enhancing professionalism’.

Jonathan said his administration had begun moves to address the anomaly, adding that seven fresh initiatives to improve the current level of non-oil tax revenue collection in the country had been unveiled.

The President, who was represented at the event by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, noted that the FIRS was currently working with a consultant, McKinsey, to plug the loopholes.

While calling for support from the institute, he said the seven initiatives would help the Federal Government to increase non-oil revenues by at least N75bn this year.

Jonathan said, “We will forge on in our implementation of sound macro-economic policies and we call on ICAN’s support, particularly as we work on improving government revenues.

“A FIRS diagnostic carried out in 2012 revealed that as many as 65 per cent of registered taxpayers have not filed their returns in two years; 75 per cent of MSMEs are not in the tax system and 35 per cent of companies operating under the Pioneer Status Incentive abuse their tax exempt status.

“The FIRS is currently working with McKinsey to plug these holes through a set of seven key initiatives to increase non-oil revenues by at least N75bn this year.

“We have already begun to see positive results and we recognise that our success will be dependent on the support, professionalism and integrity we get from ICAN members who audit many of these companies’ accounts.”

The President added that in the last 44 years, ICAN had been instrumental to the development of the country, adding that the government would continue to look forward to the invaluable professionalism and expertise of members of the institute in the coming years.

Jonathan said the structural reforms and developments in key sectors of the economy had been possible because of a stable macroeconomic environment.

For instance, he said the Federal Government was rebuilding the country’s fiscal buffers, noting that the Excess Crude Account, which declined in 2013 due to unexpected fall in oil revenues, hadsteadily increased this year, currently standing at $4.05bn.

He also said that the Federal Government would, in the next three to six months, establish a wholesale development finance institution, which would provide long-term funds for industrial development.

The President said while Nigeria was blessed with a rich network of professionals, many of who had existed for years, there were some whose actions had fallen short of professionalism in the course of their duty.

He said, “There are professionals who resort to blackmail and abuse of government and individuals when they fail to win contracts that are competitively bid. There are individuals/professionals who have resort to divisive ethnic and sexist sentiments to blackmail and undermine the government when policies have not favoured their narrow interests.

“For example, so called ‘professionals’ have attempted to undermine new approaches designed to put this country in tune with international good practice.

“Such behaviour undermines the public interest; and as professionals, you must understand that professionalism means supporting good policy that is in the wider public interest even when it does not necessarily benefit the immediate interests of you or your own association.”

Earlier, the President, ICAN, Mr. Chidi Ajaegbu, said the involvement of more professionals in resource allocation and utilisation as well as the project implementation processes would enhance the economy’s growth and development.

By extension, he added that this would also improve the collective wealth and comfort of the Nigerian people.

“The public interest will be eminently served if the allocation of resources is designed to promote the common good, adherence to the rule of law and remains the foundation of governance,” Ajaegbu added.

[Punch]

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