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Sunday, August 1, 2021

Simplified tax regime ‘ll enhance compliance —Expert

By Francis Akinnodi

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An economic expert, Williams Ogunleye, has canvassed for a more simplified tax administration to enhance voluntary compliance to tax laws.
The expert made this known while speaking with The Hope at the weekend in Akure.
According to him, the year 2020 under review saw the global economy hit rock bottom due to COVID-19 pandemic and fuelled by several other factors in Nigeria.
He stated therefore, that taxation remained one of the fiscal policy instruments being looked up to for stability at post-pandemic era.
“Before the onset of the COVID-19 pandemic, the Nigerian economy was projected to grow by 2.1% in 2020 by the World Bank. The National Bureau of Statistics (NBS) however reported the overall annual growth of real GDP in 2020 to be at –1.92%, showing a decline of –4.20% points when compared to the 2.27% recorded in 2019.
“With decline in global demand for crude and products, the average oil production declined to 1.61 mbpd against 1.79 million barrels per day (mbpd) recorded for 2019. In the same vain, the average price of crude stood at $42.89 per barrel (pb) against $64.16pb recorded at the end of 2019.
“Other impacting factors that challenged the year 2020 included the rising in inflation rate which averaged 12.98% against 11.39% in 2019; External Reserves (End Period) declined to $34.85bn against $38.60bn, while average FAAC allocations stood at N648.44bn against N678.9bn for the preceding year.”
Given this trend, Ogunleye warned against any policy that would over stretch tax payers in economy recovery efforts.
Instead, he said, “Government must avoid the propensity to introduce earmarked taxes to raise revenues, while neglecting the impact that such action would have on businesses and economic activities.
“The thinking of Section 2.2.6 of the Revised National Tax Policy 2017 is that our “taxes should be few in number, broad-based and high revenue-yielding”.
In effect, the administration of taxes should be simplified for ease of enforcement and compliance.”, he said.

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