The organised private sector (OPS) on Wednesday raised objections to the engagement of non-professionals and commission-driven consult- ants for tax collection in Lagos, saying the practice makes auditing processes cumbersome, hinders effective communication and increases the level of complexities in tax administration in the state.
Their position comes as Governor Babatunde Fashola of Lagos accused Jimi Agbaje, the governorship candidate of the Peoples Democratic Party (PDP) in next month’s general election of tax evasion.
Fashola said at the state annual taxation stakeholders’ conference held on Wednesday in Ikeja that Agbaje’s JKK Pharmacy in Apapa defaulted in payment of land use charge for three years, 2009, 2011 and 2012, and that the firm only paid for 2013 and 2014. “All those who have paid their taxes have shown that they are lawful citizens. And anyone who has failed to pay tax is a bad citizen.
He is also a cheat; such person benefits from the commonwealth- the roads, hospitals and other facilities provided by funds generated from taxes paid by the residents. Land use charge is grand rent and tenement rate; they were consolidated,” said Fashola.
Read also: Nigeria targets elusive small traders in new tax drive
The OPS comprising Manufacturers Association of Nigeria (MAN) and the Chattered Institute of Taxation of Nigeria (CITN) described the state tax policies as unfavourable to them. Joseph Emoleke, MAN’s executive secretary, speaking at the forum, knocked officials of the state government for inability of tax payers to access tax information to reconcile actual PAYE deductions and returns filed with the tax office, which, he said, inhibits transparency and does not promote employer-employee relationship.
He also pointed to what he called arbitrary demand for payment of taxes for company directors residing outside Lagos, collection of charges, fees, levies and taxes by the local governments outside what are provided for by the State Act on ap- proved list of taxes and levies, saying these illegalities even promote evasion and non- compliance of legal taxes. MAN queried the reliance on best of judgment (BoJ) as yardstick for assessing income of expatriates, noting that the practice should be in line with convenience principle of tax administration.
“The current procedure where employment letter, remuneration, fringes and other relevant documents are disregarded by tax administrators negates the principle of predictability and unnecessarily bloats the overhead cost of the manufacturing concerns”, said Emoleke.
He asked for the yearly audit exercise to be discouraged because of the man- hour productivity loss but that a 2-3 year audit exercise will be more appropriate. The organised private sector also criticised the omission and non-recognition of insurance premium and pension contribution as tax relief in the computation of PAYE in the current tax template of the state.
