Elebute Urges FG to Focus on Economic Growth
The Senior Partner, KPMG Nigeria and Chairman, KPMG Africa Mr. Kunle Elebute has urged the federal to focus on growing the economy, which according to him will ultimately increase the country’s tax base and revenue.
He also one of the ways the government can incentivise foreign investors is to lower tax rate in the country.
Elebutu said this yesterday on the ‘Morning Show,’ a breakfast programme on Arise Television, a THISDAY sister broadcast station.
On what government can do differently to enhance taxation as a major source of revenue, he said: “If you really want tax revenue to grow, you have to grow the economy. If the economy is not growing, you can’t expect tax revenue to increase.
“Another major aspect is the issue of trust. Taxpayers need to see what their money do because if you are using my tax money on expenditure and to finance elephant projects, why should we pay tax? “Granted that it is a civic duty, we must pay our taxes, but the reality where leaders and those at the helm of affairs do not use tax payers’ money to grow and develop the economy you would find that the trust equation would be broken.”
Speaking further, he said: “For me, we have to move away from the way we do our budget. Fiscal policies are all about how we can grow the economy, drive the economy to become attractive for investments and how do we use that investment to ensure we can create more revenue sources to get people to pay more taxes. “So we have always focused on Appropriation Bill. However, many countries have move on from what we call an Appropriation Bill to a Finance Bill, which reflects the fiscal policy of the government.
“If you want to make amendments to a tax law, we don’t have to wait to amend the tax law. You can use the Finance Bill to tweak the tax law regularly so that you can actually have revenue sources included in the finance bill to drive revenue and it is a more balanced document for anyone to read.”
According to the KPMG boss, to make the Nigerian economy more competitive, “tax is another way to attract investment and therefore you look at the tax rate with other competing counties.”
He added: “Overall, you have to have a fiscal policy that drives growth and investment in an economy.
“Also, if you lower taxes for just lowering taxes without a strong collection system, you could have much more leakages than the case may be.
“But bringing taxes down, hopefully more people would into the base but you have to get those not paying to come into the tax base.”
Responding to a question on why the Voluntary Assets and Income Declaration Scheme (VAIDS) failed, he said: “I think it failed because it was not properly defined on what they want to achieve and how they want to achieve it. “I think it was rushed and it was targeted to high income earners as supposed to the bottom of the pyramid where you want to increase the base.”