Financial expert wants tax processes simplified for MSMEs

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By Rukayat Moisemhe
Lagos, Dec 1, 2020 Dr Taiwo Oyedele, Fiscal Policy Partner, Pricewatercoopers, has recommended simplification of tax processes by the Federal Inland Revenue Service (FIRS), to capture Micro, Small and Medium Enterprises (MSME) into the tax net.

Oyedele made the recommendation at the Public-Private Dialogue/Survey Launch hosted by the Lagos Chamber of Commerce and Industry (LCCI) and Centre for International Private Enterprise (CIPE) on Tuesday in Lagos.

The News Agency of Nigeria (NAN) reports that the Dialogue was themed: ‘Transactional Accountability, Process Consistency, and Operational Transparency of the Federal Inland Revenue Service (FIRS)’.

Oyedele said the inclusion of MSMEs, which account for about 96 per cent of businesses in Nigeria, into the FIRS tax net would improve the revenue generated for the Federal Government.

According to him, the simplification process include the creation of a redress mechanism without retribution and a simplified subsection in the FIRS portal, dedicated to attending to the needs of MSMEs.

Oyedele, however, said trust must be built between the MSMEs and the government on infrastructure delivery among other ease of doing business mechanisms, to ensure a smooth taxation process.

“FIRS should create a dedicated portal within the portal for MSMEs, simplified and without the technical terms, to address problems with taxes.

“The FIRS should also deploy the use of technology and pass a law on usage in filing tax returns to adequately block all leakages and ensure that the taxes get to the government.

“FIRS must find a way to connect with small firms that address SMEs tax concerns.

“People pay taxes while government gets little, but it gets lost due to corruption, leakages among others.

“We also need to build trust and feel the impact of government on making business processes clear and smooth,” he said.

Mr Soji Apampa, Co-founder, Convention on Business Integrity (CBI), presenting details of a survey on MSMEs and FIRS, said it was done on 501 businesses with 376, 76 and 49 of them in Lagos, Abia and Kano, respectively.

He said the survey sought to find out issues around service satisfaction, complaints redress mechanism and examine the actual cost and time involved in procuring services by MSMEs from the FIRS.

Apampa said the key findings of the survey revealed that MSMEs do not deal with FIRS in respect of payment of all taxes
He said that they were, however, not exempted from payment of some taxes in real and practical terms.

Apampa said that 67. 6 per cent was the percentile value by respondents for informal and unreceipted payments.

The co-founder said that respondents listed reasons for unreceipted payments to include ‘thank you’, fast track process, reduced liability, reduced sanctions, and for correct interpretation of regulations.

He, however, revealed that 64 per cent of MSMEs responded satisfactorily to the services rendered by the FIRS.

“The high demands of fast track process by MSME can be looked into as a sort of specialized service by the FIRS to improve revenue into the government coffers,” he said.

Responding, the FIRS Chairman, Mr Muhammad Nami, said that the FIRS does not charge or receive payments for its services.
Nami, represented by Mr Mathew Gbonjubola, Policy Director, FIRS, said most MSMEs had their tax dealings with state-owned internal revenue services.

He, however, called for a collaborative effort with other organisations to sensitise MSMEs on tax processes.

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