By Tony Obiechina, Abuja
The Federal Government has assured the international community and potential investors that the benefits of doing business in Nigeria outweigh the challenges.
President Muhammadu Buhari gave this assurance at the 42nd Technical Conference of the Commonwealth Association of Tax Administrators (CATA), in Abuja on Monday.
The President Buhari who was represented by the Secretary to the Government of the Federation (SGF) Mr. Boss Mustapha said Nigeria is a safe and conducive destination for doing business with potentials for investment opportunities.
Buhari noted that his administration has deliberately taken strategic steps to create a conducive environment for business activities to thrive and encourage foreign direct investment.
Specifically, the President stated that “the implementation of our ease of doing business programmes monitors all indices of doing businesses in Nigeria with a view of removing frauds that are potentially employed in the way of economic progress”.
While inviting foreign investors to the country, President Buhari urged them to “come and do business in Nigeria, and I am sure you that those who have already acquainted themselves with identified challenges will testify that the benefits outweigh the challenges”.
Speaking to tax matters directly, President Buhari said “it is no longer news that rapid advancement in science and technology have led to the evolution of communication channels that have reduced distinct barriers in trade to the bare minimum”.
He noted that the “digitalization of businesses has increased purchasing power and ensured that remote access to goods and services has grown”.
“The challenge is for tax administrators now he said is “to seize the moment and ensure that the opportunities presented by technology will not serve as a basis for loss of revenue due to our inability to keep up with the gaps”, he said.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed earlier in her keynote address, said Nigeria has remained in the fore-front of the global efforts at finding equitable and lasting solutions to international tax issues, like: the long-standing issue of imbalance in the allocation of taxing rights between source and resident jurisdictions.
According to her, other tax issues that Nigeria is championing the minister said include: information asymmetry between multinational enterprises and tax authorities in developing countries; the issue of base erosion and profit shifting (BEPS); and tax challenges of the digitalised economy.
Zainab Ahmed said the Nigerian government has over the past few years, “committed huge monetary and human resources to champion the cause of developing countries”.
She said, “in some tax administrations, ICT function is limited to provision of hardware and basic software in support capacity. Whereas, automation, large data, artificial intelligence and machine learning capabilities is central to effective tax administration”.
Such capabilities she pointed out “will enable tax authorities to do e-invoicing, pre-populate tax returns, carry out automated tax risk profiling, etc”.
Mrs Ahmed further said the digital era has thrown up some exciting possibilities like exotic products, efficiency, remote-working.
However, with these exciting possibilities, she cautioned, “are embedded the tax challenges e.g. problems associated with identifying, tracking and accessing taxable transactions, income or persons”.
Extant rules she lamented “are based on physical presence which render them inapplicable in the digital era”
“Countries must cast aside their differences or individual self-interest to jointly develop workable, simple and fair solution” Zainab Ahmed stated.
Nigeria she said “is committed to working with other jurisdictions and international bodies to achieve a win-win solution.
“The “Amount A” proposal being developed by the Inclusive Framework is not achieving consensus because it is founded on win-lose principles. Only rules that promote a win-win situation can achieve the support of all” she said.
Chairman of the Federal Inland Revenue Service (FIRS) Mr. Muhammad Nami on his part said there has been an upsurge of disruptive technological innovations in the business environment.
These disruptive technologies he said “have triggered peculiar issues that tax authorities are grappling with. The business world is in a state of flux; while the character of data and its management keeps changing”.
“Consequently, tax administrators are under compulsion to align their mandates with the changes arising from technological advancements.
In matching the pace of advancement in technology, tax administrators he argued “must remain bound by the laws, regulations and codes that safeguard the sourcing, storage, processing and management of data”.
According to Nami, “in diverse ways, all members of CATA have to deal with the challenges that transformational technology has brought to the commercial space and stay ahead of the conversation”.
