The House of Representatives has passed through second reading, a bill seeking to establish a national tax crimes and oversight commission to address revenue leakages in the payment of taxes in Nigeria.
The Bill is titled “A Bill for an Act to Establish the National Tax Crimes and Oversight Commission to Address Revenue Leakages Emanating from Non-payment and Under Payment of Taxes, Irregularities in the Assessment, Reporting and Remittances of Taxes to Prevent and Combat Tax Related Crimes, to Ensure the Protection of Tax Payers Rights and for Related Matters,”.
The proposed piece of legislation was sponsored by the Deputy Speaker of the House, Benjamin Okezie Kalu and eight other lawmakers.
Leading the debate on its general principles, one of the co-sponsors, Felix Uche Nweke stated that the commission, when established, would check irregularities in the assessment, reporting, and remittances of taxes, prevent and combat tax-related crimes, and plug all leakages in the tax administration system in the country.
Tax Leakages
He noted that leakages occur where unscrupulous staff and agents of tax authorities collude with citizens to under assess the tax-payer thereby resulting in underpayment.
He said leakages also occur in the form of tax evasion, especially such that is encouraged and condoned by the tax collector and more especially among multinational corporations operating within the country.
The lawmaker further said that leakages also occur where there are non-remittances of collected taxes, that is to say where government does not get the total amount of taxes collected as a result of revenue diversion by fraudulent staff of tax authorities.
Nweke said there was need to establish an Independent Tax Crimes and Oversight Commission, which would have the capacity to investigate, audit, prevent and combat tax related crimes.
This, he said, would effectively prevent international tax evasion and other transnational organized crimes and abuses of the nation’s public finance system.
Economic Efficiency
He stressed that the bill seeks to promote economic efficiency and effective tax administration system, detect and deter evasion, fraud and abuse in Nigeria’s tax administration system and to protect taxpayer’s rights.
According to him, the establishment of the National Tax Crimes and Oversight Commission is a strategic move to enhance fiscal resilience and not about increasing taxation.
He said, “This Bill was read the first time on Thursday, 12th October, 2023. Mr. Speaker, Honourable Colleagues, the amount of revenue available to any government determines the extent to which such Government may be able to provide public goods and services. It is a pointer to how far a nation can ensure her growth and development.
“While taxation is considered the most important means of generating public revenue, it is worthy of note that nations that strive to develop aim at putting in place a fair, just, efficient and simplified tax administration system which builds confidence amongst the citizens and as well motivate and encourage citizens to pay their taxes.
“While it is one thing to fix the amount of taxes to be paid, it is another for tax collection authorities and assessors to determine the right amount of taxes to be paid in accordance with the provisions of extant tax laws. This will definitely contribute to our national security through prevention of tax related crimes, prevention of illicit financial flow derived from tax evasion, international tax schemes, cybercrime, etc.
“The Tax Crimes and Oversight Commission will not function as a law court, it will not duplicate the functions of the Tax Appeal Tribunals established in accordance with section 59(1) of the Federal Inland Revenue Service (Establishment) Act, 2007 and ti will not be saddled with any form of quasi-judicial functions.
“The Commission will primarily focus on the Oversight of the Tax Administration System, Ensuring that the Tax Authorities Discharge their Duties within the ambit of the laws: protecting, promoting and guaranteeing taxpayer’s rights, where necessary ensuring the prosecution of corrupt and fraudulent tax officials, ensuring the complete remittances of all public revenues, ensuring the increase of public Revenue not through introduction or increment of taxes but through friendly and appropriate taxation, among other things.
“The Commission will ultimately ensure that the five basic qualities of a good tax system, which include fairness, adequacy, simplicity, transparency and administrative ease, are entrenched as part of global best practice.
“Similarly independent tax auditing and investigating organizations exist in other countries; such as the Treasury Inspector General for Tax Administration (TIGTA) of the United States and the Inspector- General of Taxation and Ombudsman (IGT/0) of Australia.
“Similar Organisations exist in Ghana, Kenya, South Africa, etc. There is need to put in place an effective system which oversights tax administration in Nigeria, a system which can address taxpayers’ grievances and complaints promptly and without hassles, a system which will be so friendly and that can encourage and raise people’s willingness to pay their taxes.”
Confidence Okwuchi
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