PwC: Nigeria needs money, yet paying taxes is difficult

Taiwo Oyedele, head of tax, PwC Nigeria, says Nigeria is one of the most difficult places to pay tax despite the government’s need for taxpayers’ money.

Speaking at the recently held Tax Academy Clinic, the tax master advised the tax authorities to make technology the platform for paying taxes; not as an option.

“Technology makes things faster, more efficient and more cost-effective. It’s no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never,” he said.

“Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult.

“So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns. In the past, getting your tax clearance certificate used to be like rocket science.

“When you need it to buy a plot of land or get a contract, getting the TCC is difficult. With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems.”

He said the use of technology will ensure that the cost of tax compliance is reduced, making it easy to pay taxes.

“So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer.

“It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost.

“So you can get more people into the tax net and you can get data which is important within the economy for planning government policies that support taxpayers. At the end of the day, taxes are the way the government gets a fraction of the prosperity of people and businesses.”

During the tenure of Kemi Adeosun, former minister of finance, the federal government had embarked on the Voluntary Assets and Income Declaration Scheme (VAIDS) to widen the tax base and encourage tax compliance.