‘A good database is key to effective taxation in Nigeria’

Mr Kayode Samuel Adekunle, a fellow of Chartered Institution of Tax of Nigeria and Institute of Chartered Accountants of Nigeria, is the current chairman of CITN, Osogbo District, and has been accountant of the Nigeria Union of Teachers (NUT) for over 30 years. In this interview by MODUPE GEORGE, he speaks about the challenges of taxation in Nigeria and other issues.

Who should pay tax?

In actual fact, everybody should pay tax. There is what you call Personal Income Tax, which is being paid by individuals. Under it, we have the ‘Pay as You Earn,’ tax, which is paid by government employee. We have another, called ‘direct assessment,’ this is paid by individuals who are not receiving salaries directly from the government  They are assessed directly and according to profits being made. Companies also pay 30 percent of their profits as tax. Everybody pays tax, both corporate organisations and individuals.

 It has been discovered that there are challenges militating against the success of taxation in Nigeria; can you tell us some of them?

Indeed there are challenges, but the government is gradually overcoming them through different systems. The problem of identification of tax payers is a major one, especially when it comes to direct assessment. The other one is the mode of payment. There was nothing like e-payment in the olden days, however right now, things are a lot easier for the people. You can even pay from the comfort of your room, unlike before, when you would have to go from one place to the other. In the past also, tax collection offices are not close to the people, but government is now bringing them closer to people for easy assessment. The issue of government bureaucracy used to also affect taxation and that is why some states have adopted the idea of tax consultants. The knowledge and skill of the people who are saddled with tax collection is not adequate enough.

People have said that the level of the infrastructural development in Nigeria is not commensurate to the tax being collected, what is your take on this?

It is unfortunate that people are paying tax, but it is not being managed well. I don’t have the right to say peoples taxes are being embezzled. The pertinent question is, does the money get to the coffers of the government? Let me site an example, there are those set of people who wait by the roadside to arrest bus owners, claiming one charges or the other.  Are you saying those monies collected really get to the purse of the government?  I had been a victim once, and I had to sell my Mitsubishi L 300 bus. I discovered that when you get to a state, a set of people like touts would come around you, asking that you pay this or that. They would give you some sort of documents and when you get to another state, you will be told you that the documents are not complete and that you would have to pay for whatever again. At the end of the day, you realise that all these payments did not get to the government. This may be due to lack of proper management on the part of government.

 In Nigeria today, a lot of people still evade tax payment, what is your institution doing to create adequate awareness on the advantages of tax payment?

Indeed we have tax evasions; however we have doubled efforts in the area of enlightening the public on the reasons why they should pay their taxes regularly and other related issues on taxation. People have been coming to us to help solve problems arising from tax payments and when they do, we help analyse them and proffer solutions.

What steps would you suggest to overcome problem of multiple taxation?

First and foremost, we must improve on our database. We don’t have a very good database in this country. Some people are paying more than what they should, while some are paying less. We need to have an efficient database that could capture necessary information. A database that would capture people’s income without coming to ask them how much they are earning,  Until it gets to this level, payment of taxes would be more difficult. The BVN is a little improvement, but we can still do more.

Secondly, the usage of tax consultants is also adding to the problem of multiple taxation. Whereas, we have people, who have been assigned to do what these so called tax consultants are doing. All we need to do is to train existing tax officers and invest in them, put necessary control in place and block every loophole.