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What's Wrong With Our Tax System ?

Nobody loves to pay tax ! But we have to give Caesar His !

Nigeria is one of the best countries where taxes are circumvented.

Tax free real estate properties, autos  etc. Many businesses are not registered with the government. Those that are registered prefer to settle tax officials to paying the accrued tax. Look at Vaswani Brothers. No wonder foreign investors love putting their money in our country cos they know they can eat the meat together with the bile.  Is this normal or am I over reacting ? People won't even mind to avoid Value Added Tax.

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27 answers

@ The One:

Hope u get the correct evidence of all your payments? Do note that when the taxman comes calling, he is always the least concerned with how much you said you pay; rather, he will inquire whether you did the right amount and where is the correct proof of payment. The Nigerian system is still a bit backward as we still rely on the Tax Clearance Certificate (TCC) as evidence of tax payment. I see Mrs Omokaro's leadership doing better though in the next couple of months.

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Since the Value Added Tax (VAT) system appears to be the most effective world over (owing essentially to its indirect mode of collection), I bet a proactive government will make moves at reducing its direct taxes and increase VAT rates. Lest we forget, we all pay huge amounts as VAT everyday without a grudge.

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I don't know what a lot of you are talking about because I personally pay more than 2 million naira in taxes annually here in Lagos!!

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The Lagos State Government takes seriously its tax education obligations.It continuously educates the tax paying public on approved taxes and levies that are collectible by the State and Local Government as approved by the Joint Tax Board. For more information about taxes in Lagos State log on to www.lirs.net

Pay Your Tax

Its Your Civil Responsibility

Its the Law

EKO ONI BAJE O!

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There is nothing absolutely wrong with the Nigerian Tax System, rather, it is undergoing significant changes in recent times.

The Tax Laws are being reviewed with the aim of repelling obsolete provisions and simplifying the main ones.

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we have a tax sysytem that is simply focused on how to take more from those who are willing to pay without thinking of how to make it worthwhile. for example, a registered company not in operation has to pay for not operating regardless of why it is not yet in operation?

by the way, if you are rich, you can afford to reduce the aount you pay but if you are not, you pay whatever is decided

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why will you want to pay tax when you outrightly know that the money ends in someones pocket.

nigeria is a country where a lot of systems should be sanitized.

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Let's look at it this way. U pay ur tax like its due, but for one reason or the other, it ends up in nthe pockets of some selfish individuals who have no conscience of the plight of the masses. U want to take them to court, but because of the high legal fees, nd knowing how the legal system works, either way, u lose. what do u want to do about that? corruption has eaten deep into the DNA of the country. Once anyone hears Nigeria, they run.

I read an article yesterday about scam mails in an old copy of Reader's Digest. I quote what they say: -

Nt Africa, not a part of africa, but Nigeria. Now the very few that want to change how things work out are either frustrated out of their efforts or outright killed. see what happened to Kudirat Abiola. the one that pained me most was Nuhu Ribadu. Agreed, the guy overdid some things, but he tried his best to rid the country of some corruption. See what the country did to reward his little efforts. If such things keep on happening, i see nothing good for the country in the nearest future.

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Yet some people are overburdened with taxes including their allowances.

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to answer the question: you & I are waht's wrong with our tax system.

if you pay because you are an employee somewhere, do you know if your organisation remits correctly to the Revenue Office? Do you bother if your relations and friends pay tax?

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Lacks foresight did i hear u say? I would call it turning a blind eye. If only our government can learn that one day this thing they are relying on will plummet to the extent that the oil will become as cheap as water. There are so many other things one can invest in the country. Gone are the good ol' days when agriculture was the rife of nigeria. Man must wack now.

Back to the topic, who would want to pay taxes when they know the money they are paying is not going into developing the country's poor infrastructure but instead into the greedy pockets of the leaders. Nd we'll be hearing billions of Naira this, billion naira that. When the average family in Nigeria can hardly afford 3 square meals a day.

we are wallowing in plenty. why won't there be brain drain. nd the government is begging people to come back home. who would want to do that with the state of things in nigeria?

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@all

There is definitely a tax system in Nigeria. Whether or not it works is another story that is has a lot do with what you do.

If your company is incorporated, then you have no choice other than to file your returns to FIRS every year after which they would now compute and assess you based on your returns (CIT). I also know for sure that incorporated companies have no choice than to pay their employees' PAYE, remit VAT collected and WHT withheld from suppliers. Here is the snag, the tax authority would usually conduct tax audit regularly to confirm all returns, if there are shortfalls, they would issue a demand notice and you would have to pay. If you work with these companies, be sure that you salary is net of PAYE and other deductions as instituted by law. If you have investments in shares, your dividend for sure would come net of appropriate WHT. Your fixed deposit interests have also suffered the relevant taxes.

Here is the snag, in conducting these tax audit. A major factor that I would consider as an individual is cost/ benefit. If the cost outway the benefit, then I would rather the audit is not carried out. I would think that FIRS has the same opinion, hence they would be inclined to going to bigger companies whose outstanding tax liability (if any) would be material and worth their while.

Like rightly mentioned, as long as money keep changing hands without going through organised financial sector, or business springing up every minute without adequate registration, the issue of tax evasion would still be a problem to Nigeria.

All in all, the question is why pay additional taxes if the amenities these taxes are suppossed to provide are not available, good roads, electricity, water at the minimum,

Although I hear Lagosians are now paying taxes due to Gov Fasola's tax drive and initiative. Believe me, based on what is going on in Lagos at the moment, I would pay all my taxes. Why? I can see the results.

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Bros you are quick to judge here. We have different types of tax in Nigeria. The question is why do Nigerians (excluding private/multinational organizations) need to pay tax? Honestly am patiently waiting for your answers. Aliens like the Vaswani Brothers connived with corrupt top custom officials by evading tax meant for this country.

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tax system in nigeria? I really want to know how it works.

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great question, i think they only wanna derive it from Oil and duties at the port.

That is how "smart' they are

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oh so we have a tax system in Nigeria!!!

i thot it was only on papre

Nigeria needs to decide if it wants to be a taxing country or not

and if not, where she intends to derive her revenue from

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I love this thread.

We have a tax system that our leaders has refused to make work.

It is the job of the leaders/govt to make sure that every buz is registered and make sure every employer register the earnings of their employees and make sure that the money from it are all used in good ways.

However, in a nation where you know that the leaders and the govt will only use all the money to lace their own personal account, and their kids will be using the money to terrorize their hood, why would people wanna do that.

For the tax system to work.

There is need for educating the people about taxes

There is need to educate even the govt about how to use the people's money.

There is need for transparency.

Imagine how much can be generated from taxing the people, the business and the houses and the rides and all that and even goods in that nation?

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I would love to be paying tax at these rates: http://www.citn.org/taxrates.php

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i dont know what state u guys r talkin from but i know for sure that reg'd companies in lag r taxed thru their teeth.even workers in lag are taxed heavily.

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Proof it. Where is your source?

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The Punch: Taxes: FG records N124bn shortfall in first quarter

http://punchontheweb.com/Articl.aspx?theartic=Art200905125175165

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We are not yet ready for change in this country. Many things should be restructured. Our tax system is f.ucked. The tax officials are hella corrupt. You need to see them sealing deals when they go to companies. Do you think such officials would want an accountable tax system.

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If you scrap the tax collection system then what? No taxes = reduced income for the government= loss of jobs in the civil service.

The right direction is to work towards a more accountable system

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What are those in State and Federal Inland Revenue Service doing if their work can't be justified? Its better the government scrap these bodies.

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Effective taxation is always difficult when you have an open ended financial system. The are so many transactions in Nigeria that go unaccounted.

The fact that it engenders corruption at all levels makes the problem even more difficult to tackle, as those in positions of power would rather we maintain status quo.

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Oh come on now!! We have to consider that the same foreign businesses pay so much in bribes to get in the front door that at the end of the day, it makes sense to assume they consider it worth the pain as they can recoup losses by skipping out on taxes.

The Tax System has not always been this bad. Back in the early 80’s we had a thriving system which was taken seriously by the majority, But as corruption started taking over, people and businesses started to hold back on paying their taxes. Consider the case of the average business man who pays so much in "Egunje" each month to government officials just so his business can stay open, even after making sure his papers are in good order, what incentive would he have to pay his taxes at the end of each month or year?

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So we have a tax system? How does it work?

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