Banks, ministries, others withhold N298b tax funds
- Tax audit confab holds today
From Mathias Okwe, Abuja
IN a classic case of the property care-taker withholding the paid rent from the property owner, banks, through which taxes are paid, are keeping same for their own use while the Federal Government, owners of the proceeds, remains cash-strapped.
Also, Ministries, Agencies and Departments (MDAs) of the Federal Government are neck-deep in acts of collecting taxes on behalf of government but failing to remit same to the appropriate agency of the government.
The Minister of State for Finance, Mr. Remi Babalola, at the weekend put such tax funds owed by the government agencies and some private organisations at over N260 billion and another sum of over $260 million in Withholding Tax (WHT), Pay As You Earn (PAYE) and Value Added Tax (VAT).
Babalola made the revelation in Abuja during the yearly tax conference of the Chartered Institute of Taxation of Nigeria (CITN) which ended at the weekend.
He said the Federal Government was working on the review of the penalty for such crime.
The development is coming as the Federal Government is working on plans to shift emphasis on the dependence on crude oil revenue to taxes for the funding of her budgetary plans and programmes.
Babalola said: "The government has observed the disturbing trend of delay in the remittance of revenue collected by some banks to the appropriate authorities. There is also alarming volume of tax debts owed by companies, institutions and MDAs to government, raising question of whether the current penalty for defaulters is adequate.
"Additionally, steps are being taken to make revenue generating MDAs accurately disclose earnings, payments and remittances to the Federation Account. Indeed, the process of commissioning a process audit of all revenue-generating agencies has commenced.
"Besides, as a measure of improving the nation's investment climate, the government has rolled back excise duties on selected products as part of efforts to encourage the manufacturing sector. More importantly, the government is determined to ensure that taxes are certain, fair, easy to understand, straight forward to pay and economical to collect," he explained.
He noted that the current administration was determined to make a difference in terms of revenue generation and management of the nation's resources through effective tax administration policies and reforms.
The Federal Government, according to him, is aware of the need to enhance revenue through broadening and deepening the tax base, effective surveillance efforts and aggressive monitoring by the relevant government agencies.
In this regard, he noted that efforts were on to reform the current tax system to enhance revenue.
He added: "The proposed tax reform is aimed at addressing multiple taxation and the need to strike a balance between governments' lawful need for revenue and the desire to encourage investors. Over the years, there have been several policies aimed at tax compliance by individuals as well as corporate organisations.
"The bottom-line of such policies is the desire by all tiers of government to derive high revenue from tax. Our charge is to be proactive and look beyond the challenges of the moment to reposition the economy to effectively meet its present and future growth needs, which all Nigerians will be proud of."
Meanwhile, the minister will today declare open a four-day international conference on effective tax audit and investigation for improved compliance.
The conference, slated to hold at the Sheraton Hotel and Towers in Abuja, is aimed at establishing international best practice approaches in tax audit and investigation.
Other objectives of the conference include:
- To fight against fraud and corruption, illicit capital flight, tax evasion, tax competition and other harmful trends in tax policy and practice;
- to enhance the exchange of information between revenue authorities, corporate tax-payers and tax intermediaries across Africa in order to improve integrity and transparency of tax administrations and business structures;
- to build frameworks to improve revenue management;
- to recognise the importance of tax compliance in national development; and
- to develop professional skills and ethics.
