Thursday, September 29Inside Business Africa

‘Stamp duty charge on transactions will hamper financial inclusion’

Experts in Nigeria’s financial sector have said that the stamp duty charge of N50 on all transaction above N10,000 would hamper the Central Bank of Nigeria’s (CBN) drive to get underserved Nigerians financially included.

Specifically, Head of Tax and Corporate Advisory Services, PricewaterhouseCoopers (PwC) Nigeria, Taiwo Oyedele, said the provision of the Finance Act 2019, which requires the payment of N50 one-off duty on electronic receipt and transfers of amounts above N10,000 was unnecessary.

Speaking at the ACCA-CITN Finance Act Interactive Forum, in Lagos, he said though the provision aims to correct the issue of the stamp duty charges transferred to customers by merchants, it has placed a burden on poor Nigerians who are not merchants but are charged N50 when they receive amounts above N10,000.

He said that issues such as this have made most adult Nigerians believe that the evasion of taxes is fine, and that even if it is not fine, that it is understandable,

Citing a recent survey conducted by PwC, he said 83 per cent of Nigerians believes that tax evasion is okay.

Meanwhile, Oyedele noted that one-third of Nigerian adults say the process of paying taxes in the country is unprofessional and corrupt, as they were being asked to pay bribes for them to be able to pay their taxes.

His words: “This is very worrying because how you feel about your tax system drives your behavior. It doesn’t matter the level of enforcement because the taxman is limited by what he can do. If you do not believe in the system, he cannot make any progress.

“The number one reason people gave us for evading taxes was that they do not trust the government and that they also do not trust tax officers as well. They also said that they are not happy with the quality of public services that are being provided if at all they are provided.

“Even the few people that are paying taxes are the poorest ones. You cannot generate revenue in a way that makes you develop your economy with the people who are paying taxes when they are those who should be receiving.

“In a sane society, you exempt the poorest people from paying taxes and they get welfare on top of it but it seems to be the other way round in Nigeria.”

In his remarks, the Executive Chairman, Federal Inland Revenue Services (FIRS), Muhammad Mamman Nami, represented by Deputy Director and Tax Controller, FIRS, David Ogedengbe, said the new Act has addressed the issue of double taxation and simplified the issue of the minimum tax, noting that the issue of tax rates has been properly addressed.

He said the Act also gives a bonus of two per cent to medium-sized companies and one per cent to large cooperates who pay their taxes 90 days before the due date and exempts Small and Medium Enterprises (SMEs) whose income is below N25 million turn over threshold from Company Income Tax (CIT) and Value Added Tax (VAT).

Source: Guardian

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