It is no longer news that the relevance of internally generated revenue (in effect, taxes) to the Nigerian economy has increased considerably since the oil and gas sector fell on hard times. To keep the economy afloat, the Federal Government has, through its revenue collection agency – the Federal Inland Revenue Service (FIRS), initiated several measures to increase revenue generation through tax collection.
The measures required range from changing the prevailing tax practices and improving tax administration, to introducing new taxes and levies. Some have been worthwhile, others have proven to be limited in practicability and the rest, flat out ineffective.
The current strategy will at best, achieve modest improvement in tax revenue, as it is focused on existing taxpayers. It could also potentially increase the cost and burden of tax compliance. An example of this is the recent shift from taxing non-resident companies on deemed profit basis, to actual profit basis, with the latter requiring audited financial statements. The deemed profit basis is generally considered to be simple and certain. Whereas, the case for reparing and filing returns on actual profit basis is unproven, especially when one considers the greater administrative burd
© 2018 KPMG Professional Services in Nigeria, a limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.