Apart from deploying the law, enforcement, technology and mobilization, tax administrators must use psychology, persuasion and being firm to convince their fellow countrymen to pay tax, the Executive Chairman, Federal Inland Revenue Service (FIRS) Mr. Tunde Fowler has said.
Addressing tax practitioners and administrators from Ghana, Sierra Leone, Nigeria, Cote D’ivoire and other parts of the West African sub-region in Ghana, Fowler said tax is critical to the development of any nation.
He explained that Five thousand Naira, (N5, 000) may seem too little to do a buffet at the Transcorp Hilton Hotel, Abuja or at Eko Hotels and Suites in Lagos, “But a tax of N5,000 is enough to save the life of a child who has malaria from death”.
Fowler observed that every kobo contributed by a taxpayer “even as little as N5,000-is enough to stop the death of a child from malaria”.
According to a statement issued by Head, Communications & Servicom Department, Wahab Gbadamosi, the event was at the Annual Tax Conference of the Chartered Institute of Taxation, Ghana, (CITG) where Fowler was also given an award as an Honourary Fellow of CITG for his contributions to the tax institute.
Fowler, who delivered the lead paper at the Conference: “Strategies For Revenue Mobilisation in Contemporary Times: Challenges in Tax Legislation” said his success in establishing a connect between tax contribution of as little as N5000 and the life of a child who may die from malaria touched the hearts of some taxpayers in Lagos who turned a new leaf and became compliant taxpayers.
The FIRS Executive Chairman: said “When you ask people to pay tax, they ask you: “Why? But when you tell them that a tax of N5000 is enough to save a child from dying from malaria, their attitude about tax begin to change gradually. As a tax administrator, you have to become a teacher to save the life of a child.
“The point is that as tax administrators, we must see the work that we do, not just as another job, but as nation building. Tax collection is nation building. It is serving your nation. It is serving God. When you convince a taxpayer that the tax he/she pays could save the life of a child who has malaria from death, you could begin to touch the taxpayer’s heart.
“We can still do a lot with the laws we have now. Before the law changes, tax administrators, need to wear the hat of a teacher, a psychologist, a friendly person and a firm upholder of the law.
“I urge all of us stakeholders to be conscious of our roles in ensuring that Africa catches up with the rest of the world in moving away from dependence on resource revenue towards dependence on taxation as the primary source of funding for our development.
The FIRS Executive Chairman noted that in 2015, South Africa collected $57 billion USD. Nigeria with its oil wealth and population of over 140 million people and about 60 million taxable citizens, collected $27 billion dollars.
The FIRS chairman noted that it was curious that no member of the Organisation of Petroleum Exporting Countries (OPEC) with all their wealth-is in the league of developed countries.
Today, he noted, Venezuellans queue for food. “It can be argued that the extent to which an economy is able to grow sustainably and develops depends to a large extent on its ability to generate tax revenue to finance its expenditure and the efficiency if its tax system.
Even in Nigeria, Oil, Gas and Mining sector (6.48) is not the biggest contributor to the Gross Domestic Product of $422.59 billion dollars. The sector, he noted, takes the third place after Trade (19.15) and Agriculture (19.0).
Fowler, who stated that governments fund budget either by levying taxes or borrowing, noted that whatever taxmen do must still be within the ambit of the law.
He observed that though it is tasking, it is still possible to collect taxes with existing laws.
He, however, still reckoned that obsolete laws and challenging law amendment processes were some of the challenges to tax legislation in Africa.
He said the situation is not bleak as tax administrators must be innovative, purposeful, dedicated and result oriented.
Explaining further, he said: “With their conduct, tax administrators could convince legislators and elected office holders of the direction that tax legislation should go.
“Once this is clear and lawmakers and power holders are convinced that tax administrators are pushing for those changes for collective good, changes in tax legislation will not be difficult to advocate.
Other routes to overcoming tax collection challenges Fowler noted include, collaboration with stakeholders, robust taxpayer education, simplifying tax laws, review of waivers and exemptions, discouragement of impunity and flouting of tax laws.
He said: “One issue that is clear is that there can be no successful revenue mobilization without a sound tax law regime as a platform for implementing the strategy. Strategies which are implemented without a sound legal footing usually fail or do not stand the test of time”.
In bestowing Mr Fowler with the Honorary fellow of the Chartered Institute of Tax Administrators, Ghana, CITG’s President Nii Ayii Aryeetey and Secretary, Fred Teeteh, described the FIRS Chairman as having been of “tremendous help to the CITG”in the past years both at FIRS and as Executive Chairman, Lagos Inland Revenue Service, LIRS, for having “consistently mobilized Nigerian tax experts… who have contributed actively to paper presentations and discussions and helped to enrich our conferences.
“Those expert opinions on various tax issues” the CITG President noted, have impacted positively on communiques issued after each tax conference. This has gone a long way to shape some tax policies of our country and improved revenue mobilization”.
“The Governing Council of the CITG is very proud to be closely associated with you. Sir in recognition of your signal service to the Institute, the Governing Council confers on you, Mr. William Babatunde Fowler, Executive Chairman FIRS, and Chairman of the Joint Tax Board, JTB, Nigeria an HONORARY FELLOW of the Chartered Institute of taxation of Ghana.
Fowler thanked the CITG for honouring him: “We may be separated by borders but Nigerians and Ghanaians are brothers. I thank you for this honour, which I accept on behalf of all Nigerian taxpayers”.