The growing rate of tax revenue leakages in the digital economy has been called into question by the Chartered Institute of Taxation of Nigeria (CITN).
Despite the benefits associated with the growth of the digital economy, the institute stated that the issues faced by revenue agencies, legislators, international organizations, and tax professionals are possibly the most pressing.
This information was made public by Adesina Adedayo, President and Chairman of the Council of the CITN, at the institute’s 47th induction event, where over 800 people were admitted as members.
The obstacles brought on by technological development and complex business models continue to increase, he added, raising the risk of tax revenue leakages. He noted that Nigeria’s tax office was still unsure of the best strategy to tax the digital economy.
He noted the initiatives taken by regional and international organizations to solve the problems.
He claims that among other unilateral and bilateral measures, some of the efforts include the UN Transfer Pricing Rules, the BEPS projects’ efforts to control Base Erosion and Profit Shifting, the OECD Transfer Pricing Guidelines, and the ATAF guidelines on intangibles.
In light of this, he stated that it is their duty as tax experts and the “Hope of the Nation” to continually engage with and make significant contributions to the Country Impact Assessment of the OECD tax agreement in Nigeria.
“To do this effectively, I implore you to constantly upskill your knowledge on global trends in taxation,” he said.
Nimibofa Ayawei, executive chairman of the Bayelsa State Board of Internal Revenue, stated in his keynote speech that the state’s development will be harmed by an excessive reliance on allocations from the FAAC for funding state budgets.
He said it is more concerning when a state’s Internally Generated Revenue (IGR) is unable to cover its operating and capital expenses.
He added that increasing and maintaining IGR had remained a significant challenge for state governments and that there was a need to close the fiscal deficit in order to increase IGR levels.
He charged States Internal Revenue Service (SIRS) to get moving to increase their collections as he investigated potential methods states may increase their IGR collections.
