BREAKING NEWS, Business
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| By Anayo Ezugwu | Aug 2, 2016 @ 15:35 GMT |
THE PricewaterhouseCoopers, PwC Nigeria has advised the federal government not to increase the tax rate in the country. The company explained that increasing the Value Added Tax, VAT, would further slow-down the economy that is already in recession.
The company state this at its annual Capability Enhancement Workshop for journalists held in Lagos, on Friday, July 29. According to Taiwo Oyedele, partner, head of tax and regulatory services, PwC, the country is facing difficult times and the federal government need to ensure total compliance to tax remittance in the country. He said in the formal sector only 12 percent of the people who register with tax authorities are paying their VAT.
“What that means is that we have 88 percent that are not even paying at all. So what we need to do is to get almost everybody, we may never get 100 percent but maybe if we get 90 percent you can give a pass mark. Get more people to start paying VAT and that way the revenue we collect today can easily double without increasing the rate before we even start talking about the informal sector.
“And if you are looking at the VAT and the focus is only on the tax rate, then it’s also a wrong focus because this VAT laws we are implementing today was established in 1993 and for over 20 years there have not been any significant reforms. So what that VAT law need is actually a reform. We need to rewrite it to capture a lot of things like digital economy that wasn’t an issue when that law was established like imported services.
“In my view, focus should be on expanding the tax collection and reforming the tax system rather than focusing on the rate. And even the stage at which we are and the state of affairs now, it will be insensitive for us to start raising the rate of tax because that will slow down the economy further rather than just raising revenue,” he said.
On the crude oil forecast for 2017 budget, Oyedele said President Buhari’s 2.2 million barrels per day oil forecast for 2017 is overstated. According to him, taking into consideration the spates of vandalism on oil and gas pipelines by militants in the Niger Delta, it is over the top for the government to still place the budget on a 2.2 million bpd estimate.
He said the 2.2 million bpd estimate is an old figure Nigeria used to produce before the pipeline vandalism started. “For us at PwC, the budget is overstated for obvious reasons. There is no way the federal government should still peg the budget on the old 2.2 million barrels per day production because we know that even NNPC’s recent data shows that production is now down by some 700, 000 bpd. This means it is now around 1.3 or 1.5bpd. So, the budget is overstated and we simply are on our way to another failure on such projection,” he said.
The one day workshop was targeted at journalists across traditional and new media platforms. It featured insightful presentations on various topics by experts aimed at building the capacity of journalists and enhancing their ability to execute their duties professionally while also better positioning themselves to take advantage of future opportunities.
The annual workshop which is now in its third year is an important component of PwC’s Corporate Responsibility Strategy. It was instituted in recognition of the very important role of the media in society in informing and educating the public.
It is the firm’s strong belief that for the Nigerian people to enjoy good governance, the media must perform its role optimally and professionally and this is reflected in the quality of reporting, in the capacity of individual journalists to carry out research and investigations, in the independence of editorial judgments, and in their ability to use technology as an enabler.
This year, the workshop has been deepened and its scope expanded with an increase in the number of participating journalists especially from the online and new media channels whose impact in the way news is reported in Nigeria has been quite transformational.
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