By Stellamaries Amuwa, Abuja
The Civil Society Legislative Advocacy (CISLAC), has called on National Assembly to prioritise the challenge of reforming tax system for improved equity. Noting that taxation remains the most viable and reliable fiscal policy tool for revenue mobilization towards sustainably financing development in Nigeria and globally.
The Executive Director, CISLAC, Auwal Ibrahim Musa (Rafsanjani) made this known to journalists at the two-day workshop on reforming tax expenditure governance in Nigeria organised by CISLAC, in collaboration with Nigerian Institute of Legislative and Development Studies (NILDS) and International Budget Partnership (IBP) yesterday in Abuja.
Auwal reiterated that “As a country, we have long explored a Tax expenditure regime with the aim of realizing significant growth and development in pioneer industries, and foreign direct investment. In principle, tax waivers, concessions and exemptions are sound and ideal arrangements both as economic tools and from the viewpoint of competitive international trade. This is because local businesses/industries need to be positioned for the improvement of their fortunes for attainment of international competitiveness.
However, the Nigerian case appears plagued with challenges including abuses observable to the Nigerian public.
“According to the Global Tax Expenditure Database 2020 report, Nigeria had a Tax Expenditure of N5.84 trillion (3.8% of its GDP) which was just over 50% of its 2020 budget. In a similar manner, the Federal Government noted that the Tax Expenditures in 2021 amounted to 6.68 trillion Naira, approximately 4 percent of the GDP.
“Reports of indiscriminate waivers and concessionary approvals have all contributed to questioning the bearing and economic sustainability of this initiative of government.
The law regulating the granting of incentives places enormous discretionary powers to the executive arm of government. The governance of the incentive regime is also at best opaque and lacks the scrutiny necessary to guarantee transparency and accountability in the process leading to a situation where the supposed benefits are not optimized.”
Similarly, the Senior Programme Officer, International Budget Partnership (IBP), Chika Okoh stated that promoting a tax system that is equitable will help Nigeria to mobilize revenue and provide better services for all Nigerians.
Chika who represented the IBP Country Director noted that tax policies needs to be fair and transparent. “Revenue generated should benefit many Nigerians rather than favoring a few. This is the objective of tax equity. It is estimated that TE cost Nigeria over 6 Trillion in 2021. This means that revenue that would have gone to the provision of public services are forgone.
“While government is losing revenue through tax expenditure, vulnerable groups especially those in the informal sector are subjected to harassment and intimidation through multiple taxation at the subnational level. The role of the legislature in improving equity in our tax system cannot be overemphasized.
Earlier, the director general, National Institute for Legislative and Democratic Studies (NILDS),
Prof. Abubakar Sulaiman, said the collaboration demonstrates the commitment of the leadership of the 10th National Assembly to enhance partnerships between civil society organizations and organs of the National Assembly towards enhancing legislative and democratic governance.
“As I have always reiterated in many forums, NILDS is the only organ of government established by an act of parliament to conduct capacity-building programmes for the legislature. While we are aware that NGOs and CSOs have an interest in thematic borders on legislative and democratic governance, I encourage such CSOs and NGOs to partner with NILDS to ensure maximum impact.
“This is particularly important as NILDS serves as the knowledge hub of the legislature and is thus able to facilitate and provide technical support. Despite abundant opportunities, Nigeria has been confronted with a revenue challenge amidst a rising debt profile. Yet all sectors of the economy require increased government funding to address lingering challenges. Amidst this need for increased public spending, tax expenditures offer an opportunity to fund national development.”
CISLAC calls on NASS to prioritise reforming tax system for improved equity.
