In line with its objectives to reawaken the consciousness of tax payers, the Anambra State Internal Revenue Service (AIRS) recently embarked on tax education with a view to boosting the state internally generated revenue through voluntary tax payment. OKECHUKWU ONUEGBU reports. There is no doubt that tax is one major medium through which governments all over the world generate revenue for their day-to-day activities including prompt payment of workers’ salaries and provisions of basic amenities to the entire populace. Therefore, Nigeria is not an exception.
Likewise, the constitution of the country, Federal Inland Revenue Service (Establishment) Act 2007, the Tax Administration(Self Assessment) Regulations 2011, the Company Income Tax Act 2007, the Personal Income Tax Act 2011, the Petroleum Profit Tax Act 2007, the Value Added Tax Act 2007, among others, uphold taxations with reasons and procedures. That is why civil servants and public servants and workers at private sectors have theirs deducted from their monthly emoluments in what is known as Pay-As-You-earn (PAYEE).
Constraints to tax paymentBut available records show that citizens especially those in non-formal sector such as barbing, hairdressing, taxi business, etc. have little or zero compliance to tax payment probably due to lack of tax education and ignorance.
In Anambra state specifically, Mrs Sylvia Tochukwu-Ngige, the deputy director/head, Taxpayer Education and Enlightenment Team (TEET) of Anambra State Internal Revenue Service (AIRS) believes that low level of tax awareness in the state is responsible for poor compliance in tax payment among the citizenry.
The enlightenment campaignTo bridge this gap, AIRS in partnership with Chartered Institute of Taxation of Nigeria (CITN) and Federal Inland Revenue Service (FIRS) last week embarked on a week public enlightenment campaign entitled ‘Anambra 2020 Tax Awareness Week’ under the theme: Voluntary Compliance to Tax Payment.
The exercise, which was aimed at sensitising the citizenry on the whole process of taxation and why they should pay, featured other activities like breakfast meeting with stakeholders in tax administration including the civil societies and media, road show, visitation and engagements of people across the 21 local government areas with the aim of intimating the people about filling of Tax Returns, Anambra Revenue Stamps, Anambra State Social Identity (ANSSID) number, Whitholding Tax, Capital Gain Tax, Pay-As-You-Earn (PAYE), Direct Assessment, among others.
Stakeholders speak
Speaking at the occasion, the president of CITN, Dame Gladys Simplice, said tax is the civic responsibility of every Nigerian to comply with and backed by law. She said, “Whatever we are enjoying today are provided by the government. Have you asked yourself how the road you’re driving on were constructed? The government was able to carryon those projects through tax.”
Simplice, who inaugurated a District Society of the Institute at Onitsha, equally charged the government not to relent in its duty of providing services to the populace.
Chronicling the challenges and prospects of taxation of the informal sector, the chairman/chief executive of AiRS, Dr David Nzekwu revealed that there were an estimated 1.2 million people trading in the state but only 7,150 of them pay tax via Direct Tax. He identified non keeping of proper records by most businesses operating in the informal sector as the biggest challenge.
According to him, unavailability of data makes it difficult for an independent party to accurately evaluate the financial position of the businesses in order to determine the amount of tax payable.
“Tax administrators face major operational difficulties in trying to tax informal sector due to its transient in nature of operations, lack of proper book keeping and the large number of unregistered businesses. However, the informal sector tax payers are able to pay taxes when they are assured of tangible benefits and where there is an effective institutional mechanism for enrolment and administration. The most straight-forward administrative strategy for improving informal sector taxation is simply to reorganise tax administration so as to strengthen monitoring and provide more focused incentives for administrators to target at the informal sector,” Nzekwu added.
He, however, disclosed that the state has created an avenue for effective capturing of tax payers in both formal and informal sectors via Anambra Social Service Identity Number (ANSSID), a unique identification number for every transaction with the state government, which according to him, has captured over 300,000 tax payers, even as the state has started deploying Community Revenue Officers (CROs) charged to effectively relate with tax payers across 181 communities in the state.
But Professor E Nwadialor, who spoke on Tax Education: Stakeholders Engagement, urged more engagement and continuous sensitisation of the populace on why they must pay tax and what had been achieved with the tax already paid. He argued that majority would be inspired to fulfill the civic responsibility when the government improves on welfare especially on infrastructural development.
“People need to know what tax is all about and the type of tax they need to pay. The AIRS and FIRS should not relent in educating the tax payers on tax laws why they must pay, who to pay to and how to pay. They should see them as those not knowledgeable about tax and should be educated to comply. You don’t need to employ force. Identify their critical stakeholders and educate and motivate them to pay tax. The government should also provide for their plights; good road network, electricity and others. This would inspire them to comply,” Nwadialor echoed.
Another speaker, Prince Ikpo Okereke, while speaking on Managing Self-Assessment and Voluntary Compliance in a Growing Tax System, advocated for what he termed self assessment method and voluntary tax compliance, as according to him, they were essential ingredients for effective and efficient tax administration and by extension, the realisation of government revenue objectives.
Okereke emphasised that, “Self assessment enhances voluntary compliance and the net effect would be increased revenue generation, decrease in compliance cost, a more satisfied tax payer and better nation. When people voluntarily carry out an action, the resultant effect is that it would be cheaper and easier and at the same time likely to yield more satisfaction to all the stakeholders.
“Two major ways of achieving such a win-win situation is the term self assessment in the context of taxation refers to the responsibility bestowed on the individual taxpayer to compute his tax liabilities and make the tax returns accordingly to the relevant tax authority. The FIRS circular- ‘Understanding Self-Assessment’, the term ‘self-assessment’ was described as a method whereby a tax payer is required to correctly compute own tax liability, properly complete the tax return, pay the self-assessed tax and submit the tax returns together with the accompanying documents on or before the due date according to the relevant tax law.”
To achieve this, the scholar listed procedures to achieving it as tax payer education, equity and fairness in treating tax payers, impartial and speedy judicial process, simplicity of tax laws, efficient tax payer services, effective tax payer complaint management procedure, tax incentives accountability and transparency and low compliance cost.
But Prince Chris Azor, the chairman, Anambra Civil Society Network, urged the government and her agencies to do more in tax administration and management as according to him, the task for tax administrators is majorly to drag more big businesses into the tax net rather than focusing mainly on the informal sector, especially, the micro and small businesses.
Azor maintained that, “Again and more importantly, sensitisation, enlightenment is very key and imperative. There is need for partnerships with the civil society, the media and all citizens/stakeholders. Citizens should know why they pay taxes, who are authorised to collect and what their taxes do for them (dividends) in terms of development. There must be referrals and feed-back mechanisms to engender buy-in and ownership. Authorities must eschew all forms of double/multiple taxation and malpractices in collection, transparency and accountability.”
