This is really a short but incisive one. “Tax-ttitude” simply denotes a lexical blend of two important words – “Tax” and “Attitude”. In every tax system, several factors and issues are indispensable and as we will realise, the attitude of tax payers to their tax obligations is as important as the need to sustain the economy.
A recent corporate taxation statistical analysis and report has been released by the Organisation for Economic Cooperation and Development (OECD) – http://www.oecd.org/tax/beps/corporate-tax-statistics-database.htm. Putting at least, a hundred (100) countries in consideration, the report notes that despite depleting corporate tax rates in African countries, significant tax revenues continue to be derived from it (corporate taxes).
Indeed, corporate taxes form a large portion of tax revenues in African countries (15.4%). Certain issues may be identified as identically contributing to an increase in corporate tax revenues generated despite depleting effective tax rates. One of such issues might be that of the improving incentives available to corporate entities. One of such incentives that “burst my brain” is Intellectual Property Income, and the Research and Development Expenditures aimed apparently at encouraging entrepreneurial and genuine corporate creativity, and Research and Development.
Meanwhile, in the midst of this short discourse, there is a very remote issue I must quickly reveal. Corporate Tax revenues are significantly on the increase and this is really fantastic. In Nigeria, we must acknowledge the current and ongoing revolution of the tax system by the enigmatic leadership of the Federal Inland Revenue Service (FIRS) by Babatunde Fowler. However, the remote issue is: How competitive are the tax revenues?
Competitiveness of tax revenues refers to the balanced consciousness of the need to improve tax revenues across all edges of the tax system. Corporate tax revenues should not be extremely higher or lower than the revenues derived from other existing taxes. The only justification for such development might be an intentional policy by the government to bridge the gap between the different income earning levels. But a critical scrutiny of the National Tax Policy in Nigeria does not practically uncover or disclose this.
The point must be made clear. Tax revenues derived from the informal sector remains a burning issue that must be radically addressed. The increased corporate tax revenues should bring national joy and jubilation the same or in similar way as tax revenues from the informal sector through personal income taxes do. I do not intend to make this article too long. I rest my hopes on the impending National Tax Conference organised by the Chartered Institute of Taxation of Nigeria in April, 2019 for a critical address of these issues.
Taxation is the most viable hope of maintaining economic equilibrium and properly diversifying the economy. Its potentials are too much to quantify. Why delay its exploration then?
OLUKOLADE O. EHINMOSAN
LAW AXIS 360°
Associate Attorney at S.P.A. Ajibade & Co.||Lead Partner/Editor-in-Chief at Law Axis 360°