High-net-worth Nigerians and businesses, according to the Federal Inland Revenue Service (FIRS), are underreporting their assets and depriving the federal and state governments of tax revenues.
This information was revealed by Johannes Wojuola, the Executive Chairman of FIRS’ Special Assistant for Media and Communication, yesterday during a courtesy visit by the FIRS team to The Guardian’s corporate headquarters in Lagos.
He said that the richest individual in South Africa, who is also the second-richest person in Africa, paid more in personal income taxes than the combined internal revenue of all 36 states in Nigeria, casting doubt on the sincerity of the country’s wealthy residents.
Wojuola noted that the majority of the wealthy people have their assets outside of the country and paradoxically, the richest guy in Africa is a Nigerian.
“Our system operates in a situation where the state government collects personal income tax. Whatever the wealthy people declare, the governor cannot tell them they are under-declaring except they do not want second terms in office,” he stated.
He claimed that this is one of the concerns the FIRS is raising in relation to the reformation of the nation’s tax systems through data harmonisation to enable greater revenue collection and the right individuals paying the correct taxes.
According to him, the FIRS has also suggested that the federal government or the FIRS be given the authority to tax high net worth persons or the assets of Nigerian citizens abroad.
He contends that public servants and wealthy people cannot lead extravagant lives while urging the populace to do their share.
When this is accomplished, according to Wojuola, the precise money accrued to the nation will be collected.
“With such a situation, we will not be having this unusual disparity where the second richest man in Africa is paying more tax than the entire IGR of all states in Nigeria that have the richest man.”
“Part of the Taiwo Oyedele-led committee, the mandate given to it is to look at how we can also reduce the number of taxes generally collected in the country and focus on the high revenue earning taxes,” he said.
According to Olarinde Olufemi, Technical Assistant to the Executive Chairman of FIRS, Section 24 of the Federal Constitution requires every individual to legally report their income and pay taxes to the appropriate government body.
“Now whether you earn income in Nigeria or not, especially those in Europe and doing business in Nigeria and receiving their money. The law says if you do business in Nigeria, you have a significant economic presence in the country and you will pay tax like every Nigerian company because you are competing with other businesses in Nigeria and you are paying no tax. It is a competitive disadvantage to local companies,” he said.
In order to ensure that the government fulfills its responsibility for accountability and delivery as well as bringing to light problems when they arise, he urged the media to assist and collaborate with the government as crucial stakeholders in tax collecting.
“When we see the government spending outrageous sums on needless projects, it is also on the part of the media to call it out because it is your tax money at work.”
“When we begin to hold them accountable for our tax money and how they spend it, we will see the benefits of our taxes,” he said.
Martins Onoja, Managing Director/Editor-in-Chief of The Guardian Group, emphasized that the nation has issues with taxation without representation and does not use it to build the infrastructure.
He claimed that people in highly industrialized, developed nations without any connection to the oil industry squander all of the money they receive in taxes.
She claimed that due to their integrated tax collection systems, they are entrepreneurial and manufacturing nations.
