Anambra Tax Awareness Week: CITN Boss advocates accountability, good governance as key to achieving effective informal sector taxation.

The President of Council, Chartered Institute of Taxation of Nigeria (CITN), Dame Gladys Simplice says governments at all levels can really achieve its aim of effectively taxing the informal sector, if only they can show prudence, accountability and quality performance in the administration of public funds.

The CITN Council President was speaking during a breakfast meeting she had with the Chairman, Anambra State Internal Revenue Service, Dr David Nzekwu in Awka as part of activities marking the 2020 Tax Awareness week in the State.

The breakfast meeting with the theme “Taxation of the informal sector: challenges and prospects”, brought together, professionals and key stakeholders in the tax business in the State with a view to raising the people’s awareness on tax and related issues.

According to figures from the National Bureau of Statistics (NBS), Anambra State with over 1.2 million of its citizens involved in trading, ranks tops in the list of states that the largest number of its citizens engaged in trading activities.

Discussing the topic, Dame Gladys Simplice attributed the low rate of tax compliance across the country to insufficient tax education and the general loss of confidence in the government’s ability to appropriately administer public funds.

According to her, the Institute is deploying moral suasion as a means to get the government to be more prudent and judicious with the public funds as a way of encouraging the people to see the importance of tax payment.

“It is becoming increasingly difficult for tax administrators to undertake their jobs because of the resistance put up by our people because they think the Government has not done enough with the funds available to them. The era is gone when government business is conducted shadily without recourse to the implication on the people. Today, people ask questions on governance and when they do not get satisfactory answers, it affects their compliance with obligations, not just in the area of tax. As an Institute, we will continue to escalate these negative reactions to the government so they know how the people feel about their administration,” she posited.

The CITN Boss, however, said non-performance is not enough reason for people to avoid tax as it is now a serious offence under the law.

“Data is being collected all over the country and despite how one may try to hide, your BVN will link you. So, it is very important that we pay our taxes. Tax does not kill instead it gives you that satisfaction that you have done your part in the development of your society. I want to give kudos to Anambra Internal Revenue Service for leading this charge to get the people adequately sensitized on tax issues and I hope other states can take a cue from this positive engagement,” she said.

In a paper titled, “Voluntary Compliance with Tax Payment”, the Vice-Chancellor, Tansian University, Professor Eugene Nwadialor stressed the need for government to deemphasize the use of force but to first engage the citizens to understand the essence of taxation and be able to key involuntarily.

“The process must start tax education. Our people need to know what is tax, the various types of taxes, who should pay what, when should you pay, how do you pay, what penalties await who does not pay among other basic information around the tax business. You don’t ask them to go and read the law. In modern tax administration, people should be engaged and treated by tax administrators as customers. The autocratic system of getting the people to pay tax has failed over the years and government needs to evolve a more pragmatic system that will give taxpayers confidence that they are part of the system and that their taxes are used appropriately,” the University Don alluded.

In a presentation, the AIRS Chairman, Dr. Nzekwu explained that the State government has a strong interest in taxing the informal sector because of the large number of persons that fall under this category and the need to explore internal means of shoring up its revenue.

“Although it may appear difficult to deal with, there are huge potentials for revenue growth in the informal sector. While Anambra has an estimated 1.2 million people trading in the state, only 7,150 individuals pay via Direct Tax. There is the argument that people under the informal sector are mainly the poor and those striving under difficult conditions to run their businesses, especially in situations where there are no basic amenities. We believe that for government to effectively create all these basic amenities required by this category of people, they need to support with taxes,” he said.

He explained that to fully maximize the prospects in the sector, the AIRS has commenced efforts at formalizing the sector through the establishment of a system of building critical data on the sector and developing modalities for its effective administration.

“This is what we are doing using the Anambra Social Service Identification Number (ANSSID) where we have gotten a clean database of over 300,000 eligible taxpayers. This unique identification number is required for one to do any transaction with the state government. There are also other laws that we are leveraging on such as the Personal Income Tax Act (2011) which provides for the documentation of all businesses in the state under the business premises register. We are also re-organizing tax administration so as to strengthen monitoring and provide more focused incentives for tax administrators to target the informal sector,” Nzekwu revealed.

In his contribution, the Deputy Speaker, Anambra State House of Assembly, Paschal Agbodike said the state can do a whole lot better in revenue if a significant percentage of its teeming population that contributes towards revenue growth in other states, imbibe the think home philosophy.

The 2020 Tax Awareness Week in Anambra, entails week-long activities which include advocacy visits, town hall meetings sensitization programmes and roadshows, aimed at drawing public consciousness to the need to voluntarily pay their taxes.

 

Subscribe to our newsletter for latest news and updates. You can disable anytime.