To widen Nigeria’s tax net, a global accounting firm, Stransact, has urged the Federal Government to create systems that would improve data collection of business transactions across the country.
This, the firm advised, would make the government achieve a more holistic inclusion of tax payers.
Partner, Tax and Strategy, Stransact, Victor Athe, who commended current efforts of the Federal Inland Revenue Service (FIRS), at deploying technology for collection of taxes by connecting all business premises to a central server, said it was a step in the right direction.
He explained that the COVID-19 pandemic has created a major impact through a significant up-scale in the level of digital and electronic transactions.
He revealed how Nigeria progressively implements the OECD BEPS Action Plan 1, by addressing the tax challenges arising from digitalisation, by incorporating amendments into Companies Income Tax legislation (via the recently enacted Finance Act, 2019).
This, he further said, was targeted at grabbing the country’s fair share of taxes from digital and other off-site transactions that would have normally escaped taxes in Nigeria before the amendments were introduced.
According to him, if proper strategies, systems and human drivers (with the required technical depth and experience) are effectively harnessed, tax could be a dependable source of revenue for Nigeria, in no time.
He noted that emerging economies like Nigeria, had, in the past, lost a lot of tax revenues through aggressive tax planning measures instituted by multinational enterprises that actually generate a lot of economic value from their Nigerian operations.
However, he maintained that current efforts by Nigeria to tackle the Base Erosion and Profit Shifting (BEPS), by keying into several multilateral frameworks portend a positive outlook for increased tax generation from cross-border transactions.
They include the Country-by-Country (CbC), Multilateral Competent Authority Agreement (MCAA), and the Common Reporting Standard (CRS) MCAA, as well as the creation of appropriate local regulations such as the Transfer Pricing, CbC Reporting and CRS Regulations.
All these and other related developments, he added, would further create an increased demand for professional services.