Manufacturing firms in the country have advised the Federal Government to reduce corporate tax and focus on getting more people into its tax net.
A former Chairman, Association of Food Beverage and Tobacco Employers, Mr Paul Gbededo, gave this advice while speaking exclusively to our correspondent on the sidelines of an interactive forum for the Manufacturers Association of Nigeria and the Federal Inland Revenue Service in Lagos on Thursday.
At the meeting, which was called to resolve the taxation dispute that resulted in the freezing of accounts of some firms, the Chairman of the FIRS, Babatunde Fowler, had explained that 1.2 million firms and 10 million individuals had been added to the FIRS tax net.
Gbededo, who is also the Group Managing Director, Flour Mills of Nigeria Plc, said, “For us, manufacturers and MAN as a body, what we are encouraging is a better drive to get more people into the tax net, rather than increasing taxes.
“Indeed, for ease of doing business, the trend in the world today is to reduce corporate tax and I think the FIRS should be thinking in that direction as well. They should reduce corporate tax but increase the number of people paying taxes because there are so many people not paying taxes.
Reacting to the explanation by the FIRS boss that some of the firms whose accounts were frozen did not remit the Value Added Tax and the withholding taxes they collected from members of the public to the Federal Government, Gbededo said, “The answers he gave are very comforting to us because he is very clear; he is following due diligence and execution has always been the problem.
“However, mistakes were made and he modestly apologised and wrote personal letters to those companies that were compliant but had their accounts frozen for a while.
“So he is reassuring us that not just himself but also his officers should be able to follow the due diligence and make life easier.”
He added, “Doing business should be easier, which is what the government is driving at and his tax drive should in no way be a clog in the wheel of ease of doing business in the country.
“But it is all good and well now. He said he got about N5.3tn as tax in 2018, which is unprecedented in the history of the country and I think that shows that his strategy is working.”
Earlier in his welcome remarks, the President, MAN, Mansur Ahmed, noted that the interactive session was timely and would help to resolve some challenges that manufacturers were encountering in their relationship with FIRS.
He said, “I believe that this meeting will provide the platform for us to fully ventilate our experiences. This is important, given the role of manufacturing in the industrial and economic development of our country and the concomitant effect on employment generation, technology acquisition and wealth creation.
“The association would like to assure you that we share the view of FIRS, which is part of the transformation initiatives of the present administration that seeks to create a more prosperous economy through diversification of the economy and government revenue away from oil-dominated foreign earnings to more predictable sources that have the potential to accelerate the country’s economic growth.
“MAN appreciates what the FIRS has been doing, especially in the last three years; given the fact that the revenue from taxes has significantly improved and is fast becoming another credible source of our central government’s yearly budget funding.”