“ Know-how adoption for tax compliance stays low ”
Regardless of the widespread adoption of know-how within the administration of a number of points of operations in Nigeria’s monetary providers trade, the know-how has but to be harnessed in tax administration.
This was among the many findings of a latest survey performed by PwC Nigeria of senior executives from numerous sub-sectors of the monetary providers sector in Nigeria.
The survey, which discovered low adoption of know-how for tax compliance in Nigeria’s monetary providers sector, defined that solely payroll administration has been extensively adopted for tax compliance.
The shortage of fiscal technique and excessive transaction taxes equivalent to withholding tax (WHT) and worth added tax (VAT) are different notable findings of the investigation.
In keeping with the survey, round 47 p.c of tax features in Nigeria’s monetary providers sector don’t have or are unaware of a tax technique.
The survey interviewed key gamers within the monetary providers trade, together with banks, insurance coverage firms and pension fund custodians. Government administrators and CFOs mixed made up 60 p.c of respondents, whereas the remaining respondents included tax administrators and monetary controllers at 33 p.c and seven p.c respectively.
Mr. Kenneth Erikume, analyzing the survey, Associate, Tax Reporting and Technique at PwC Nigeria, mentioned: “Organizations at the moment function in very dynamic native and world tax environments.
“On the native degree, we’re witnessing an aggressive dynamic from the tax authorities to consolidate the income era aims of the state and the federal authorities.
“It offers the tax perform higher duty than ever earlier than. It additionally limits the tax perform, usually lowering it to a compliance-focused unit, somewhat than a possible strategic associate serving to to understand the company imaginative and prescient and execute the enterprise technique. “
The vast majority of organizations surveyed, particularly within the banking sector, both had a fully-fledged tax perform or have been within the course of of building one for no less than 5 workers.
The survey report suggested organizations within the course of of making a full-fledged tax perform to think about how they are often optimized.
This may contain figuring out doable processes that may very well be outsourced or outsourced. Reorganizing the tax perform round duties that refocus workers’ power in the direction of extra strategic processes would outline a profitable tax perform.
Taxation as a perform should have a documented technique that aligns with the general enterprise technique.
“It’s not uncommon for transaction taxes equivalent to withholding tax (WHT) and worth added tax (VAT) to high the checklist of taxes with a higher probability of resulting in obligations. extra tax or important publicity to tax audits. Certainly, Nigeria’s monetary providers sector is characterised by excessive quantity of transactions, a number of places and is susceptible to tax dangers with guide tax processes, ”mentioned Erikume.