Correspondent of Nigeria Real Estate Hub, Esther Adeniyi, had an interview with Professor Teju Somorin, immediate past President of Chartered Institute of Taxation of Nigeria, (CITN) on taxation, and multiplicity of taxes, policy reversals, tax evasion and the role of the government.
Below are excerpts from the interview session.
NREH: Would you please introduce yourself ma?
Prof. Teju: I am Professor Teju Somorin. Until the 8th of June, 2017, I used to be the 12th president of the Chartered Institute of Taxation of Nigeria, CITN. On that same day, the 13th President came on board. I am also the immediate past President and the first female of another body called the West African Union of Tax Institutes (WAUTI). I relinquished that position on the first of March, 2017. I also happen to be the head of yet another Tax Body called the Association of African Tax Institutes (AATI). I am also the first female to head that body as the chairman of its Caretaker Committee. I still hold that position.
I retired from the Federal Inland Revenue service (FIRS) as a Coordinating Director/Group Director, where I worked for 34 years. I now lecture Taxation at Babcock University and Igbinedion University as a Part Time Lecturer. Very soon, I am starting another lecturing work at Caleb University as Professor of Taxation.
NREH: Thank you very much ma. For how long did you serve as the President of the Chartered Institute of Taxation in Nigeria?
Prof. Teju: It is usually a two-year tenure. I came on board in June, 2015 and I relinquished that position on June 8th, 2017. The current President will also release the position to the next person in 2 years’ time. Some professional bodies like the Association of National Accountants of Nigeria, (ANAN) also have two years as their tenure. ICAN has one year tenure.
NREH: Ma, would you kindly share some of your achievements at the helm of affairs of the body?
Prof Teju: Well, quite a lot because many initiatives were introduced during my tenure. First of all, we didn’t have our own office in Abuja, at the Federal Capital territory; we were operating from a rented apartment. Within the first six months that I got elected as President, we were able to have our own apartment which now houses our own Abuja Liaison Office.
Secondly, since 2001, CITN had wanted to endow a professorial chair in taxation in one of the Universities in Nigeria. It had not been possible. I was able to do that with the help of my team. As I speak now, the Chartered Institute of Taxation of Nigeria has endowed a professorial chair in Taxation and Fiscal Policy at Babcock University.
Thirdly, when I came on board, I noticed that some of the staff of the Chartered Institute of Taxation of Nigeria were not vast in taxation. I introduced something called “Presidential chat on tax matters”. We discussed so many tax topics.
Also, I made sure that during my tenure e-voting was introduced. The last voting exercise was not done manually as we used to do, it was e-voting. These are just few of the achievements.
NREH: In your own opinion ma, how can the government get to have more people pay their taxes without the near unwarranted pressure?
Prof. Teju: I think this is simple. Very simple in the sense that the government has to encourage the tax payers to pay tax voluntarily and as when due. Let me give you a personal example. When I was in Paris in 1982, I was not supposed to pay tax as a student but because of the services I enjoyed there, I felt like paying because everything was working and I know that things are still working there.
Government should provide goods and services that will make life comfortable for the citizens. There are two sides to a coin. The government needs money to provide all these. The government cannot print money to do this else there will be inflation. The government has a role to play; the citizens also have a role to play. Both the government and the governed should play their roles, but to answer your question, what government needs to do to make people pay is to provide all the services the government should. The government should spend the tax money judiciously so that tax payers can see what their money is used for. There are some states where tax payers money is being well used.
NREH: Thank you very much ma. Some people are agitated about taxation in Lagos state generally. They say it has turned into a revenue generation tool and not what it is meant to be. How would you react to this?
Prof. Teju: well, what I can say is that there is something in taxation called aggressive taxation. In some cases a Tax man has to be aggressive because there are different groups of tax payers. Some tax payers will pay voluntarily. There are also some tax payers that will not pay no matter what you do. There is another group of tax payers that cannot pay; they have other demands competing with the tax. The groups that refuse to pay, the government needs to be aggressive and the method of aggressive tax drive has paid off. Some taxpayers will only pay when you enforce although it is not the best approach, this is why tax authorities preach voluntary compliance.
NREH: real estate stakeholders claim to be confused about the frequency and multiplicity of taxes. Would you say the frequent policy reviews, ignorance or tax evasion attempt is the cause?
Prof. Teju: Well, change of policies, policy reversals, is not peculiar to Nigeria. There may be need to reverse a policy. You know taxation is linked to economic growth. Economy actually dictates how taxation is run so in a few cases there may be cause to dictate how a tax system is run. The only important thing is that when a policy is changed the government should carry the citizens along and explain why there is need to.
NREH: How is the Federal Government addressing the issue of multiplicity of taxes?
Prof. Teju: The Federal government has not been folding its hands about multiplicity of taxes. As far back as 1998, the government has been doing a lot to address it. Dealing with people is difficult. When you put a law in place and people are not ready to abide by that law it becomes difficult for the government to implement that policy. It is not that the government is not doing anything, the problem is the people, all of us; we are the cause of sustaining multiplicity of taxes.
The issue of multiple taxes first came to the attention of the Federal government in 1997. The Manufacturers Association of Nigeria(MAN) wrote a letter to the then head of state. In it MAN complained that the manufacturers were paying too many taxes; they listed all the taxes they have been paying, over a hundred or more types of taxes and levies. Some of them were charges, fees, tenement rates, not all of them were taxes. The then Head of State sent the letter to the then chairman of the Joint Tax Board to comment on it. A Committee was later put in place to come up with the number of Taxes, levies, fees and charges that were being collected in Nigeria. The outcome of the exercise was stunning as the study revealed that numerous taxes, levies and fees were being collected from poor citizens. This led the Federal Government to enact Decree 21, 1998 known as Taxes and Levies, (Approved List for Collection) Decree. It is now an Act of the National Assembly, Cap T2 LFN 2004. The law was not complied with in all the States as the allocation from the Federal Government was not sufficient to run the states as they had to look for alternate funding of their operations. This is the root of all the tax aggressiveness. However, to make the law workable, it was amended in 2015 by an Order which streamlined the taxes to be collected by the three tiers of Government.
NREH: How can tax payers better hold the authorities accountable for the way tax payers’ monies are spent?
Prof. Teju: well, they have to keep talking but the talking is not to the tax authorities but the government itself because the government is the one that decides how to spend the money. One thing you need to understand is that the Tax Authorities who collect taxes have no power to decide on how the tax money should be spent. We should not talk under the table. There can be public hearing; there are other mediums that we can employ to talk to the government, newspapers, radio, television houses and other programmes etc. I think everybody should be involved in the running of the government.
NREH: Thank you very much ma. It was very enlightening