audit tax consulting corporate finance accounting and financial … · 2020. 8. 30. · audit tax...

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Inside Tax Tax Administration in Nigeria & the Challenge of IT: When is the bold play? store the information of tax payers and is proposed to facilitate real information sharing and data exchange among tax authorities and stakeholders such as the Central Bank of Nigeria, Nigeria Customs Service, Corporate Affairs Commission, Nigeria Bureau of Statistics amongst others. ? Integrated Tax Administration System (ITAS): Implemented by the Federal Inland Revenue Service (FIRS) and billed to have been launched at pilot offices, this system aims to promote electronic filing and payment of federal taxes. This system is meant to reduce physical interaction between tax payers and the FIRS. ? Automated payment systems: The objective of this system was to simplify the tax payment process, track payments made by tax payers, issue electronic receipts and withholding tax credit notes where applicable. Whilst the above initiatives are The impact of advances in information and communication technology in sectors such as transportation, communication, entertainment, education, banking, health care, etc, is undeniable. The upsides of yielding to automation, leveraging ever small innovative gadgets and more efficient applications in the above areas far outweigh the attendant social ills. We are indeed in a privileged era where technology keeps simplifying hitherto grueling tasks or making near 'impossible' assignments possible. In the area of tax administration, most developed countries have recorded significant mileage in tax collection by automation and leveraging appropriate applications to: ? identify tax payers; ? obtain financial information; and ? ensure taxes are paid to the treasury. This has led to increase in the level of tax compliance and ultimately, tax collection, increase in delivery of social services, greater transparency and better accountability. In the light of this reality and the general realisation that it would be foolhardy if Nigeria continues to solely depend on oil revenues whilst neglecting other non-oil sources, adapting the tax administrative processes to technology on a bigger scale than it is currently becomes an imperative. No doubt, tax authorities have taken certain “baby steps” to automate and engage technology and its applications in the tax administrative process. Examples of such “baby step initiatives” include: ? Unique tax identification number (U-TIN) project: Funded by the federal and state governments but overseen by the Joint Tax Board (JTB), U-TIN is an electronic system which is meant to to various smaller databases run by different agencies (immigration, customs, health, financial, security system etc.) which the tax system can access for information as the need arises. ? Tracking hidden income: There are instances of unidentified income earned by taxable persons by tax authorities. Though financial institutions have a mandate to provide information, the reality is that the interface for exchange of information between the financial institutions and the tax authorities can be greatly improved. With the cashless policy fully operational in Nigeria and the consequent integration of more tax payers in the financial system, there is palpable opportunity for tax authorities to track unidentified income through integrating their systems with financial institutions'. Thus to move forward in the revenue diversification agenda of which tax is a critical pressure point, there is an urgent need to make a bold play and appreciated, they barely scratch the surface of the fundamental challenges that hinder the optimization of tax revenues. These fundamental challenges include in no particular order of importance ? Identifying/capturing taxable persons: There is the challenge of lack of reliable, comprehensive and inter-related suite of data to increase the degree of capture of potential taxpayers outside the tax net or track those within the tax net but which have defaulted significantly in complying. One element common to countries with advanced tax administration systems is the availability of robust database management system which at the minimum manages the details of all persons (companies or individuals, dead or alive) including date of birth, health profile, work profile, educational profile etc. whether or not he is a citizen, a resident, or anyone who has interacted with that country. This system is seamlessly connected There is an urgent need to make a bold play and raise the anté in the process of fast tracking the transition or migration of the systemic processes of tax authorities to appropriate application platforms that will deliver solutions in identifying and capturing all taxable persons outside the tax net ... raise the anté in the process of fast tracking the transition or migration of the systemic processes of tax authorities to appropriate application platforms that will deliver solutions in identifying and capturing all taxable persons outside the tax net and their “hidden income” on which tax has not been paid. Though the transition will not be cheap, the good news is that the skills and other capabilities to drive and deliver on that project are available locally. Furthermore, the quest to access information on taxable persons must be managed within the context of the demands of data privacy and security obligations to avoid unintended exposure to or unwanted law suits from aggrieved taxable persons. This publication contains general information only and Akintola Williams Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. Akintola Williams Deloitte a member firm of Deloitte Touche Tohmatsu Limited, provides audit, tax, consulting, accounting and financial advisory, corporate finance and risk advisory services to public and private clients spanning multiple industries. Please visit us at www.deloitte.com/ng Oluseye Arowolo Partner Tax & Regulatory Services [email protected] | Fatai Folarin Lead Partner | Tax & Regulatory Services [email protected] . © 2015. For information, contact Akintola Williams Deloitte International capabilities with local delivery

Transcript of audit tax consulting corporate finance accounting and financial … · 2020. 8. 30. · audit tax...

Page 1: audit tax consulting corporate finance accounting and financial … · 2020. 8. 30. · audit tax consulting corporate finance accounting and financial advisory risk advisory services

InsideTaxTax Administration in Nigeria & the Challenge of IT: When is the bold play?

store the information of tax payers and is proposed to facilitate real information sharing and data exchange among tax authorities and stakeholders such as the Central Bank of Nigeria, Nigeria Customs Service, Corporate Affairs Commission, Nigeria Bureau of Statistics amongst others.

?? Integrated Tax Administration System (ITAS): Implemented by the Federal Inland Revenue Service (FIRS) and billed to have been launched at pilot offices, this system aims to promote electronic filing and payment of federal taxes. This system is meant to reduce physical interaction between tax payers and the FIRS.

?? Automated payment systems: The objective of this system was to simplify the tax payment process, track payments made by tax payers, issue electronic receipts and withholding tax credit notes where applicable.

Whilst the above initiatives are

The impact of advances in information and communication technology in sectors such as transportation, communication, entertainment, education, banking, health care, etc, is undeniable.

The upsides of yielding to automation, leveraging ever small innovative gadgets and more efficient applications in the above areas far outweigh the attendant social ills. We are indeed in a privileged era where technology keeps simplifying hitherto grueling tasks or making near 'impossible' assignments possible.

In the area of tax administration, most developed countries have recorded significant mileage in tax collection by automation and leveraging appropriate applications to:

?? identify tax payers;

?? obtain financial information; and

?? ensure taxes are paid to the treasury.

This has led to increase in the level of tax compliance and ultimately, tax collection, increase in delivery of social services, greater transparency and better accountability.

In the light of this reality and the general realisation that it would be foolhardy if Nigeria continues to solely depend on oil revenues whilst neglecting other non-oil sources, adapting the tax administrative processes to technology on a bigger scale than it is currently becomes an imperative.

No doubt, tax authorities have taken certain “baby steps” to automate and engage technology and its applications in the tax administrative process. Examples of such “baby step initiatives” include:

?? Unique tax identification number (U-TIN) project: Funded by the federal and state governments but overseen by the Joint Tax Board (JTB), U-TIN is an electronic system which is meant to

to various smaller databases run by different agencies (immigration, customs, health, financial, security system etc.) which the tax system can access for information as the need arises.

?? Tracking hidden income: There are instances of unidentified income earned by taxable persons by tax authorities. Though financial institutions have a mandate to provide information, the reality is that the interface for exchange of information between the financial institutions and the tax authorities can be greatly improved. With the cashless policy fully operational in Nigeria and the consequent integration of more tax payers in the financial system, there is palpable opportunity for tax authorities to track unidentified income through integrating their systems with financial institutions'.

Thus to move forward in the revenue diversification agenda of which tax is a critical pressure point, there is an urgent need to make a bold play and

appreciated, they barely scratch the surface of the fundamental challenges that hinder the optimization of tax revenues. These fundamental challenges include in no particular order of importance

?? Identifying/capturing taxable persons: There is the challenge of lack of reliable, comprehensive and inter-related suite of data to increase the degree of capture of potential taxpayers outside the tax net or track those within the tax net but which have defaulted significantly in complying. One element common to countries with advanced tax administration systems is the availability of robust database management system which at the minimum manages the details of all persons (companies or individuals, dead or alive) including date of birth, health profile, work profile, educational profile etc. whether or not he is a citizen, a resident, or anyone who has interacted with that country. This system is seamlessly connected

There is an urgent need to make a bold play and raise the anté in the process of fast tracking the transition or migration of the systemic processes of tax authorities to appropriate application platforms that will deliver solutions in identifying and capturing all taxable persons outside the tax net ...

raise the anté in the process of fast tracking the transition or migration of the systemic processes of tax authorities to appropriate application platforms that will deliver solutions in identifying and capturing all taxable persons outside the tax net and their “hidden income” on which tax has not been paid. Though the transition will not be cheap, the good news is that the skills and other capabilities to drive and deliver on that project are available locally.

Furthermore, the quest to access information on taxable persons must be managed within the context of the demands of data privacy and security obligations to avoid unintended exposure to or unwanted law suits from aggrieved taxable persons.

This publication contains general information only and Akintola Williams Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

Akintola Williams Deloitte a member firm of Deloitte Touche Tohmatsu Limited, provides audit, tax, consulting, accounting and financial advisory, corporate finance and risk advisory services to public and private clients spanning multiple industries. Please visit us at www.deloitte.com/ng

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Deloitte presents a 2 day seminar onEmployees & Executive Compensation Planning

Best Company to work for in Nigeria - 2015And the winner is …

Akintola Williams Deloitte has been awarded the following recognitions by the Institute:?? No. 1 in Nigeria for the “Best Companies to Work for” – Large Population Category ?? Best Practice Awards in Nigeria for “Delivering Excellence in Learning and Development”

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tax corporate finance risk advisory services audit consulting accounting and financial advisory

The FATCA train has left the station. Proactivity in managing its impact and implications for Nigeria's FSI is what is required

Inheritance tax rules however need to be applied in such a manner that the rules are not harmful to those who accumulated their wealth through sheer hardwork and industry

The need to ensure consistent valuation of capital expenditure amongst the various government agencies who would in performance of their duties need to validate the values of capital expenditure made by businesses emphasizes the relevance of the IID

The profits earned by a unit trust are subject to tax in the hands of the trustees

this is a collective scheme that continually issues and redeems units (shares) after the initial public offer

?the open-ended is one which the fund continually creates issues and redeems units after the initial public offer

Best Company to work for in Nigeria - 2015And the winner is …

Akintola Williams Deloitte has been awarded the following recognitions by the Institute:?? No. 1 in Nigeria for the “Best Companies to Work for” – Large Population Category ?? Best Practice Awards in Nigeria for “Delivering Excellence in Learning and Development”

“GREAT PLACE TO WORK”

Deloitte makes an impact that matters.

tax corporate finance risk advisory services audit consulting accounting and financial advisory

Best Company to work for in Nigeria - 2015And the winner is …

?Closing the revenue gap of State Governments

?Employees' PAYE tax audit: 08052090545

Oluseye ArowoloPartner Tax & Regulatory [email protected]

| Fatai FolarinLead Partner | Tax & Regulatory [email protected]

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© 2015. For information, contact Akintola Williams Deloitte

International capabilities with local delivery

Yomi OlugbenroPartner | Tax & Regulatory [email protected]

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Fatai Folarin

Lead Partner | Tax & Regulatory Services

[email protected]