The federal government has been advised to periodically carry out tax reforms so as to increase tax's contribution towards financing the country's budget.
The Partner and Head of Tax, Regulatory and People services KPMG, Mr. Wole Obayomi said this yesterday while speaking at the KPMG Tax Breakfast Seminar where various stakeholders discussed the theme: "2018 Budget: The Unfinished Business," at an event that took place in Lagos.
Obayomi said: "Governments all over the world use the budget to actually know the finance base. But in Nigeria, we focus more on the appropriation budget which is the spending part of the budget without really emphasising on the finance aspect with respect to revenue generation.
"In the last couple of years, the government became challenged with the non-revenue generation and the time has come for us to return to the approach in the military era where soon after the budget is announced, a decree would be issued to launch a tax reforms each year, with a view to increase tax revenue for the government. There is really urgency at this time when oil prices are stable and the revenue coming from oil is unpredictable."
"So, the reality which ought to have dawn on everyone in government is that it is not a stable source of revenue but with tax you can project much better with that. However, you now find the government squirting out existing taxpayers and that would not come about the tax revenue we need in order to enhance non-oil revenue to us an assurance of revenue inflow in each financial year."
He further added: "The time really has come for government to wake up to reality that the change that needs to come in the tax system is about reforming tax annually and even in the course of the year they are developments in view of tax reforms which is done all over the world where emphasis on tax as a stable and sustainable source of revenue to the government.
"Government can and they should penetrate the informal sector they can double the existing projection amount. Also, the N18 billion the government projects to recover from VAIDS process is not ambitious at all. Anywhere in the world where you don't have tax compliance and where there are no sanctions and government is budgeting so little it means they are not ready to enforce tax compliance post VAIDS period."