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Why Nigeria needs to improve its ease of tax payments

As part of Nigeria’s efforts at becoming a leading investment destination in Africa, an aspect of the economy to give top priority is the “Ease of Tax Payments.”

Mr. Yomi Olugbenro, Head, Tax, West Africa at Deloitte Professional services made the argument at the recent 2019 NSE CEO Interactive session on the Consumer Goods sector, the event which took place in Lagos attracted senior business executives of some corporations in the consumer goods business.

Olugbenro noted in a report in Proshare that despite Nigeria’s recent improvement in the World Bank’s 2020 Ease of Doing Business ranking, which saw it move from a position of 145 to 131, there was a clear need to scale up reforms and provide a seamless process for the ease of paying taxes.

The tax expert said that a recent report released by the Organization for Economic Cooperation and Development (OECD) showed that the country was still below 7% in its tax to GDP ratio.

Speaking further, he noted that Africa’s average is about 17%, while the OECD average is at 35%.

He believed Nigeria could improve and be competitive like its fellow African countries, namely; South Africa, Kenya, Mauritius and Ghana, that have good ranking when it comes to the ease of paying taxes.

Nigeria slipped by two (2) places from 157 to 159 in the Global ranking on the ease of paying taxes.

Deloitte’s senior tax analyst believed that Nigeria has carried out major business and tax reforms within the year, but other African countries had a faster pace in terms of their tax administration strategies.

He emphasized the need for a productive Nigerian economy, stating that the amount of tax revenue that nations get is a reflection of their economic prosperity, noting that tax is a fraction of profit, and without profits, corporations will be unable to pay taxes.

Giving the outlook for Nigeria’s tax regime in 2020, Olugbenro advised businesses to brace up for the challenge ahead in terms of tax, and the pressures from regulatory revenue authorities.

On the proposed Value Added Tax (VAT) increase from 5% to 7.5%, he called on businesses to evaluate the impact and begin to make plans around stakeholder value preservation.

Dele Fashomi
Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93. Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism. He had done many courses in communication, including the EU-BBC Editing Course in 2002. Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013). He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers. He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 - 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 - 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor. Dele Fashomi is now the Publisher/Editor-in-Chief of newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye - DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography - AGAINST ALL ODDS. There are many other books in the works under his pen.