Tax Evasion As National Nightmar

Tax Evasion As National Nightmare

Rahaman Onike

The disclosure by the Minister of Finance, Mrs Kemi Adeosun that there is prevalence of tax evasion in Nigeria as she fingered 363,000 companies involved in the fundamental breach of the law of the land on taxation. This is an eye opener that most new companies don't pay taxes and by extension it is an evidence of high level of moral degeneration and decadence in the nation's tax administrative system. It was during a panel discussion that the Minister made the ugly revelation which has actually exposed the quantum of fund the country is loosing to tax evasion and this was estimated to be several billions of naira in taxes just within the period of seven months captured. Candidly, the allegation cannot be waived as a product of imagination since it was raised by the Minister of Finance.

Only God knows what the figure would be, If the investigation extends to the previous regimes. In a way, one may not be able to resist the temptation to see the issue as a conspiracy between tax officials and the defaulting companies or probably it is a case of outright negligence by tax officials.

Although tax evasion under whatever guises is a common and universal phenomenon but the current trend calls for serious concern. Beyond rhetoric , government needs to focus its searchlight in the direction of the country's tax laws and administrative system. In my view, tax evasion practices cannot be perpetrated without the connivance of officials of Federal Inlands Revenue Services (FIRS) and the Boards for Internal Revenue at state levels.

It is worrisome to note that some companies in Nigeria prefer entering into secret agreements with tax officials to out rightly dodge the payment of tax or to surcharge the payment to the government. In most cases, the motif behind surcharging the tax payment to government is draw the substantive or proportional share of the payable tax into their private accounts through negotiations and bargaining. Any time such evil is perpetrated, it is the masses that suffer the deprivation.

Even where the services of consultants are engaged for effective tax administration, members of public still have reasons to groan. The consultants are also vulnerable as their main concern is always to make quick money from enforcement of tax laws on behalf of the government.

It is no longer a news that some tax consultants do explore the loopholes in the nation's tax system for personal gains.

Sometimes it is the incompetence and lack of expertise of inspectors of tax that aided the defaulting companies in exhibiting blatant disregard for rules and for demonstrating a kind of daring gut. An encounter with some tax officials would cause one to question the appropriateness of the recruitment policy as it relate to academic qualifications and skills possessed by the tax officials which make them to be qualified for the job of tax managers and administrators.

Of course, the way a nation handles its tax system would determine rate of economic growth and national development. It becomes therefore to point that for any nation to achieve prosperity, there must be conscious effort to entrench the culture of transparency and accountability in the enforcement of tax laws and administrative system in the country.

This is to further reinforce that tax revenue is an essential component of capital expenditure in the budgeting system. If taxes are paid as expected, there will be enormous revenue realisable from taxation to keep the economy going on a sustainable scales. Also, the crave for economic expansion and diversification can only succeed, if the revenue base is broadened. Obviously, we need attitudinal change to escape the wrath associated with non payment of tax by the citizens.

In the saner societies, taxes management and administration are like goldmines and these largely sustain the economy of such nations. Again, the revelation by the Minister of Finance provides a logical premise to support my stand that the country is currently under siege of the capitalists who are continually milking the nation of our common wealth through tax evasion and avoidance practices.

As it is, the loopholes and leakages in the nation's tax system need to be blocked for the country to overcome the challenge posed by tax evaders. With the avalanche of companies involved in the fraudulent practices and sabotage, I think the government needs to consider the option of carrying out the reform of the entire tax system in line with global best practices. However, where there are reasonable grounds to establish culpability of any individual or company in the alleged tax evasion as echoed by the Minister of Finance, it is my candid opinion that the culprits and their accomplices be prosecuted in line with extant laws on such matter.

This dastardly act needs to be condemned by all. If the laxity is not mitigated in good time, it will make mockery of the ongoing war against corruption of President Muhammed Buhari's administration. Not only that, it will portray us a disordered nation.