As part of Nigeria’s efforts at becoming a leading investment destination in Africa, an aspect of the economy to give top priority is the “Ease of Tax Payments.”
Mr. Yomi Olugbenro, Head, Tax, West Africa at Deloitte Professional services made the argument at the recent 2019 NSE CEO Interactive session on the Consumer Goods sector, the event which took place in Lagos attracted senior business executives of some corporations in the consumer goods business.
Olugbenro noted that despite Nigeria’s recent improvement in the World Bank’s 2020 Ease of Doing Business ranking, which saw it move from a position of 145 to 131, there was a clear need to scale up reforms and provide a seamless process for the ease of paying taxes.
The tax expert said that a recent report released by the Organization for Economic Cooperation and Development (OECD) showed that the country was still below 7% in its tax to GDP ratio.
Speaking further, he noted that Africa’s average is about 17%, while the OECD average is at 35%.
He believed Nigeria could improve and be competitive like its fellow African countries, namely; South Africa, Kenya, Mauritius and Ghana, that have good ranking when it comes to the ease of paying taxes.
Nigeria slipped by two (2) places from 157 to 159 in the Global ranking on the ease of paying taxes.
Deloitte’s senior tax analyst believed that Nigeria has carried out major business and tax reforms within the year, but other African countries had a faster pace in terms of their tax administration strategies.
He emphasized the need for a productive Nigerian economy, stating that the amount of tax revenue that nations get is a reflection of their economic prosperity, noting that tax is a fraction of profit, and without profits, corporations will be unable to pay taxes.
Giving the outlook for Nigeria’s tax regime in 2020, Olugbenro advised businesses to brace up for the challenge ahead in terms of tax, and the pressures from regulatory revenue authorities.
On the proposed Value Added Tax (VAT) increase from 5% to 7.5%, he called on businesses to evaluate the impact and begin to make plans around stakeholder value preservation.