Capacity for Research and Advocacy for Fair Taxation (CRAFT)
The federal government has continued to make efforts to improve tax administration to generate additional revenue for development. The Federal Inland Revenue Services (FIRS) has introduced the Integrated Tax Administration System (ITAS) project targeted at optimizing tax collection and improving voluntary compliance levels among payers by automating tax administration while ensuring transparency and efficiency, access to information and data with grievance mechanisms. This has been dome on as a pilot phase and is being monitored for effectiveness and is aimed at reducing the level of human involvement in the collection of tax to curb corruption as it will enable taxpayers file tax returns and pay their taxes online. This is to complement the now established application of the tax identification numbers which is being integrated with the tax systems at sub-national level. The Presumptive Tax Regime (PTR) for informal sector is still being developed through wide consultations and has reached advanced stages. Following the consultative sessions in 2013, the recommendations and templates have been sent to the Boards of Internal Revenue for each state of the federation for further consultation and possible adaptation as the final template is designed to be applicable nationwide.
The FIRS activated the Transfer Pricing Regulation (TPR) of 2012. A TP Division was set up and first requests to Companies to submit TP policies made on January 2014. This is in response to the increasing voices highlighting Transfer Pricing as a harmful tax practice adopted by MNCs to reduce tax liabilities and deprive the government of much needed revenue. The FIRS is making efforts to enforce tax laws through litigation and judicial intervention as deterrent and other institutions like the Independent Corrupt Practices Commission, ICPC, are undertaking tax fraud investigations and discovering that about 156 companies and forged tax certificates. In response to findings from the NEITI audit, the FIRS had commenced the re-computation of petroleum profit tax assessments and making efforts to recover unpaid taxes from some international oil companies.
The Federal ministry of Finance introduced a sector wide fiscal incentive regime to enhance competitiveness, fairness and equity to replace previously selective and individual based. The Ministry also, in response to findings from a study by a consultant it engaged toward the end of 2013, plans to adopt five strategies to improve tax revenue which was put at seven percent of GDP. It hopes to achieve this by engaging a consultancy firm to work with the FIRS to increase non-oil tax revenues. The proposed strategies include improved audit, tax filing enforcement, review of tax holidays and exemption, tax arrears and debt enforcement, increased registration of companies, and improved external communication. This, it hopes will progressively increase tax revenues to 22 percent of GDP by the end of 2015. The Joint Tax Board, JTB resolved to harmonize about 89 taxes paid to avoid multiple taxation and criminalize proliferation of tax collection channels by sub-national governments to stop extortion, which affects lower end informal sector players, marginalized groups, and especially women. This will reduce multiple taxation and exploitation and complement what some sub-national governments are doing. The instances of multiple taxation remains a problem unfairly increasing the tax burden on lower end informal sector participants, especially women, aggravating poverty and inequality and government remedial action slow in coming in spite of wide acknowledgement of the issue.
- Oxfam Novib
Purpose of the Project
- To increase the membership of and strengthen the Tax Justice Platform in Nigeria.
- To increase awareness among citizens on tax justice, accountability and tax information. This will be aimed at building a critical mass of informed citizens who understand the need to comply with tax regulations by paying their tax while at the same time, being sufficiently informed to demand for accountability.
- Provide documented information on the lists of statutory taxes and their rates that will be disseminated as tool kit for select groups in the informal sector in pilot states to engage issues of over taxation, multiple taxation and extortion by tax officials or illegal tax collectors.
- To strengthen the capacities of CSOs and citizens at the state levels to research and advocate for tax justice issues and essential service delivery at sub-national levels
- Civic education
- Policy advocacy
- Alliance building