Nigeria’s tax czar, Mr. Muhammed Nami, Executive Chairman Federal Inland Revenue Service (FIRS), has called on all that are involved in the tax system, the government tax bodies and tax payers, to create a common platform for exchange of diverse ideas on taxation..
Nami while speaking at the 2022 Kaduna State Tax Dialogue today at Kaduna described tax dialogue as a tool for engendering tax compliance through collective ownership of the tax system, as well as a means to strengthening tax systems. He maintained that dialoguing on tax was very necessary for inclusivity, fairness and pooling expert ideas to aid tax policy formulation, which ultimately strengthens tax administration.
Elaborating further he said, “Tax dialogue is a multi-sided communication channel that enables every view to taxation be aired and considered. By so doing, it lends itself to inclusiveness in the design and implementation of the tax system thereby engendering the spirit of collective ownership which, ultimately, promotes voluntary tax compliance;
“Dialoguing on tax prevents destructive conflicts as no one feels cheated or unfairly treated. Where this do not exist what follow is conflict and rebuff and he cited the Boston Tea Party where resistance to the Tea Act of colonial England created room for the Declaration of Independence in 1776. “When governments do not dialogue with the people on the taxes they wish to impose, they create room for conflict and even rebuff.
Speaking on the concept of the “Social Contract” that exists between the government and the citizens, Mr. Nami explained that for the government to provide public goods for the enjoyment of citizens, citizens had the duty to provide government with the needed resources to do so by paying their taxes.
“As much as individuals running the apparatus of government are liable to satisfy the yearnings of citizens for public goods, it is the duty of the citizens to supply the resources required. This is the Social Contract and also two-sided– it involves the duty of government to provide public goods for the enjoyment of citizens on the one hand; and the duty of citizens to provide government with the resources needed to provide those public goods on the other hand. Citizens fulfil their side of the Social Contract by paying taxes with minimal prompting.”
Mr. Nami further noted that two key drivers of voluntary tax compliance are effective communication and trust, and that “Tax Authorities must develop effective tax communications strategies while governments, at all levels, must ensure taxpayers receive value for taxes paid.”
The FIRS boss further called on tax authorities to implement data-driven tax administrations, noting that “modern and efficient tax administration is run with data.”
“Nigeria needs appropriate statutory framework for a centralised data sourcing, warehousing, analysis and retrieval system that every tax authority can plug into.”
Muhammad Nami also called for the harmonisation, at all levels of government, of all revenue generating functions into a single platform under the administration of one revenue authority to reduce cases of uncertainty and instability in the economy.