Mr. Kola Babarinde is a consummate tax practitioner who has passed through the rigours of learning and career development to attain the Fellowship of the Chartered Institute of Taxation of Nigeria (CITN). He is the Chairman of the 21st Yearly Tax Conference of CITN, which kicked off today, in Abuja. In this interview with Assistant Editor, Finance and Economy, CHIJIOKE NELSON, he says germane discourses on national tax system are increasingly becoming topical and the institute would as usual, contribute its quota through the conference.
What issues will form discussions in this year’s annual tax conference?
This is the 21st edition of the institute annual tax conference. The first was held in Ibadan precisely in 1998. The main theme for this year conference is “National Development – Unlocking the potentials of taxation”.
The importance of taxes to the political, economic and social development of any country remains a topical issue of discourse, especially, in terms of the infrastructure it is able to provide.
Major economies, the world over, regard taxes as a hot topic with far-reaching consequences when left unattended.
Taxation is a veritable fiscal tool by which government achieves its macroeconomic objectives. Other topics outlined for discussion during the conference include: are corporate governance and ethical tax behaviour, tax transparency-implication of international conventions and agreements, taxation and ease of doing business, tax defaults; options and choices, global tax transformation: implication for economic growth and development, tax payers expectations and government responsibilities and lots more.
How has government treated previous communiqué of the annual tax conference?
Government has been responding positively to the Institute communiqué. The present government is more interested in taxation than any other sources of revenue generation.
It has come to realize the importance of taxation as a sustainable source of revenue particularly, the recent instability in oil price and discoveries of oil by other nations of the world. Furthermore, taxation uses are broad and also serve as a catalyst for boosting capacity for sustained growth.
Between tax rate increase and getting more people into the tax net, where do you stand?
I am an advocate of widening of tax net. That is, getting more people into tax bracket will ultimately be better than increasing tax rate that will eventually translate to high cost of price of goods and services. It is a known fact that cost of living is very high in the country, and an average Nigerian provides water, electricity, roads, security, among other things, for himself.
Any attempt to increase tax rate whether Value Added Tax, Company’s Income Tax or introduction of new tax under any guise, will further worsen situation for the citizen.
Has government responded appropriately to issues of yearly tax law review, as recommended by previous conferences?
With all sense of modesty, the institute’s input in the Personal Income Tax Amendment (PITAM) Act 2011 and National Tax Policy for instance, attests to this fact.
Besides, the Institute has been enjoying good relationship with the governments at various levels.
Government needs to do more in this regard though; the process of making laws takes time, this may actually result in delay in yearly review of tax laws. Nonetheless, there are laws that are either final or presidential assent stage.
I, as a person, believe that the creation of Taxation Committee as a distinct committee of the two National Assembly chambers will further strengthen tax laws and improve its reviews.
In your estimation, did returns from tax amnesty justify the huge campaign?
Yes. Indeed, the end justifies the means. Firstly, it has increased tax net. For instance as a result of Voluntary Assets and Income Declaration Scheme (VAIDS), a lot of tax evaders used the opportunity provided to regularize their tax positions without paying penalty and interest.
This in turn increased taxpayers base in the country. Secondly, money, hitherto lost to tax defaulters, was recovered by the government through VAIDS. Thirdly, it has led to improved tax compliance and awareness among the Nigerians within and outside the country.
How sure are you that issues will be thoroughly discussed to enlighten participants?
Seasoned facilitators and discussants in the field of taxation, fiscal policy and economic issues both within and outside are coming to present and discuss papers during the conference. The lead paper is going to be delivered by Mr. Tony Elumelu, CON.
What are the side attractions?
We have hospitality night where the Institute district societies from the 36 States and Abuja will be making presentations in dance, play, among others.
Also, there will be various sporting games such as draft, ludo, ayo olopon, long tennis, three-kilometer walk and novelty match. The climax is Gala Night on Friday, with a life band on stage.
In recent years, annual conference has been held more in Abuja. Is there any special consideration?
Abuja, apart from being the federal capital territory, it is more central in terms of location. Besides, it is the seat of government officials who need to participate in the event.
Where are we getting our tax policy wrong- Framework or implementation?
I will like to respond to the question from both ends. We need to get the right people involved at the formulation stage (framework) and also during implementation to ensure that the intent of the laws would be achieved.
Our tax laws are bedeviled with ambiguities and inconsistency. This of course, creates interpretation problems and more often than not, provide avenue for manipulations.