BY COBHAM NSA, ABUJA – Nigerians must embrace taxation as the new normal of national fiscal policy as revenue accruing from its natural resources can no longer fund the nation’s annual budget.
The consensus among industry stakeholders is that accepting this reality will put the country on a good stead to explore and exploit taxation as new funding source for effective implementation of the apropriation Act.
These were submissions made by Panelists and discussants on a Webinar organized by a firm, OTISVIP to share their thoughts on tax sector developments and the post- COVID-19 era.
The panelists agreed on taxation as a viable option to compliment government’s revenue flow from natural resources in a lively public debate that centred on the Stamp Duty campaign timing and the application of tax revenue in the nation-building processes, especially in building public infrastructure.
They also stressed the need for prudent management of tax revenue, urging Nigerians to accept that the current tax net must be expanded to accommodate more citizens for holistic national development
Panelists and discussants on a webinar organized by a firm, OTISVIP, and which had in conversation, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, made this submission at the weekend.
The well-attended Webinar, with the theme: “Stamp Duty: The New Black Gold?”, was hosted by Mr Jake Effoduh, a partner at Praxis & Gnosis Law with the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Muhammad Nami in attendance.
The online programme panelists included: Dr Alexander Ezenagu, an Assistant Professor of Taxation at Hamad Bin Khalifa University (HBKU), Doha in Qatar; Managing Partner, Sprout Digital, Mrs Damilola Anwo-Ade; and Director, VoguePay, Malam Mohammed Jega
Others are: Managing Director, Trace Anglophone West Africa, Mr. Sam Onyemelukwe; Founder, The Alpha Reach, Mr. J.J.Omojuwa; Director, Tax Policy, FIRS, Mr Mathew Gbonjubola; and Dr Asheikh Madugu
A statement by FIRS’ Director, Communications and Liaison Department, Abdullahi Ismaila Ahmad, disclosed that other FIRS management staff participated in the session which had the Service Executive Chairman, Mr Nami, setting the ball rolling with a detailed clarification on the Stamp Duty Act in Nigeria.
His presentation covered types of transactions dutiable under the Act as well as the respective applicable rates provided therein. Thereafter, the panelists flagged off discussions that were enlivened by live chats as well as simultaneous question and answer session.
Leading the discussions, Director, Tax Policy, FIRS, Mr Mathew Gbonjubola said Nigerians must reassess the widespread notion that the country is rich, stressing that “in terms of Gross Domestic Product vis-à-vis our population, Nigeria is not a rich country when compared to a country like Botswana.”
According to him, the stamp duty is levied on the instrument of transaction and not on the payment itself, even as he clarified that the six (6) per cent stamp duty is for tenancy above 21 years while seven (7) to 21 years lease or tenancy attracts three per cent (3%) and less than 7-year tenancy is below one per cent (1%).
In his intervention, Assistant Professor of Taxation at HBKU, Qatar, Ezenagu urged governments at all levels to focus on expanding economic activities through economic diversification.
For him, such development would engender positive impact in the economy by increasing the tax base given that there would be more economic activities to tax, instead of increasing taxation on the citizenry.
A citizen contributor with the username ‘Yusuf.Nibox’ said: “Stamp duty is unlike other taxes: It needs rigorous drive through sectoral specialist tax monitoring. flat rates e-transactions are the low-hanging fruits but the computational ad valorem rated stamp duty on contracts, agreements etc need driving through monitoring or some sort of purity measure to compel compliance.”
Also, another citizen discussant with the username ‘Cnjoku’ stated: “I have to disagree partly on the fact that non-stamping of documents doesn’t make it illegal. Transactions do not just occur in a vacuum. It has to be validated.
“For instance, if you make a land transaction, you must register it with the registry and get C of O to validate the ownership even when you have paid for it.”
“Stamp duty on individuals is collected at state level where it is not fully enforced or even collected. I agree that the threshold on bank deposit is too low such that it affects the poor Nigerians”, Cnjoku said.