Across African countries, the loss of revenue lost to tax evasion is estimated at $50 billion, more than what the continent receives as development aid. Unsurprisingly, this is a huge problem for many of these low and middle-income countries. Many of them have ways to explore tax evasion; however, there is also a need to widen the scope of taxation and tax crimes. For one, tax crimes manifest in various forms: citizens not submitting tax returns, providing false answers in order to reduce tax liabilities, non-remittance of deducted taxes by companies, non-remittances of value-added tax by vendors and retailers- among many others. To address this, Nigeria’s National Assembly has passed for a second reading, a bill that would establish the National Tax Crimes Commission as a separate and independent tax auditor for tax administration in the country. On the week’s penultimate edition of Business Edge, Tolulope Adeleru-Balogun is taking a look at Nigeria’s plans for a tax crimes commission and she’s joined by Taiwo Oyedele, Fiscal Policy Partner & Africa Tax Leader at PWC Nigeria.
Is a separate tax commission necessary to audit potential or already committed tax crimes? The sponsor of the bill at the National Assembly Orji Uzor Kalu certainly thinks so: the vulnerabilities in Nigeria’s current tax system are been exploited by people, taking advantage of technological advancements and the globalized economy. Taiwo Oyedele doesn’t discount the concept of would-be criminals exploiting loopholes in the law, but he thinks Nigeria does not yet have a full grasp of the scope of the situation. “In the case of Nigeria, we have not properly assessed what the problem is before trying to prefer a solution,” he says.
For example, in Nigeria, individuals who earn at least 30,000 naira per annum are expected to file their personal income tax returns latest by March 31. Most Nigerians are not even aware of this legal requirement. According to Oyedele, the tax authorities must first define the legal parameters around current tax stipulations before considering other options.
Watch the illumination conversation on Business Edge above.