No controversy on tax laws, just naysayers making noise — Adedeji

Zacch Adedeji, Executive Chairman, Nigeria Revenue Service, in this interview with Arise TV on Sunday, said the controversies trailing the new tax laws are being fuelled by those averse to their implementation.   How concerned are you about the controversies that have trailed the Tax laws? Tax reform is one of the promises made by […]

Zacch Adedeji, Executive Chairman, Nigeria Revenue Service, in this interview with Arise TV on Sunday, said the controversies trailing the new tax laws are being fuelled by those averse to their implementation.

 

How concerned are you about the controversies that have trailed the Tax laws?

Tax reform is one of the promises made by Mr. President from his inaugural speech because we’ve all seen from the beginning that the fragmented tax system we have cannot sustain the kind of development that Mr. President envisioned. That is why from the beginning, he made it a point of duty that we need to start early to reform the tax system, which is the foundation for any sustainable economy in the world.

Remember that he set up the committee headed by Taiwo Adeniyi Oyedele, spent one year for consultation with various groups, which I know you were also part of in that period, and gathered data and normal processes. To put the plan together after receiving the blessing of Mr. President, it was sent to the National Assembly, and all the processes of lawmaking were followed, which then was not in secret as public hearings, regional engagements were done, which ended in June when the President assented to the bills as presented by the National Assembly and got gazette before being given to us.

Now, when you talk about controversy and everything that happens with all change in the world because you have certain people that prefer the status quo, you have some people that just don’t want you to succeed. So, all those things are expected and there should not be anything that should distract us from the real focus of the reform.

So, if you ask me, we don’t have any controversy whatsoever because the Nigerian constitution stipulated what each arm of government should do and then in this instance, I think that has been properly done.

So as of today, we have the gazetted laws as passed by the National Assembly, which is a duty of us, as revenue administrators, to implement the laws as given to us by the National Assembly. So, we don’t have any issue and we are not distracted by those controversies.

It is very difficult for people to give away their income, which, unfortunately, is part of the tax bills. But in one summary, the whole essence of reform is to tax rights, not taxing more. We just want to tax rights, bring fairness, transparency and then consolidate the whole system in order to simplify and unify the process of revenue administration.

 

Many Nigerians will agree with you about the necessity of reform, but the key argument is that the process itself is compromised?

Like I said earlier, I don’t want you to delve into those rumours. If we want to run a nation, we need to stick by the rule and make sure that we have verified facts on all these forms of allegation. I just explained to you; the process of lawmaking is very clear.

When the president has assented to any bill, it goes back to the Clerk, who gets it gazetted, and gives it to us.

For example, all these comparisons that were allegedly changed, honestly, I don’t know where it was found, because nobody, except the National Assembly, has the right to the vote book and they are the ones to give us the gazetted one.

If you read the paper three days ago, they have released the gazetted laws as passed which is the only thing we have. So, when you talk about the executive having a hand and doing all these things, it has no place in the law.

Also, if you follow the National Assembly institutional resolution of that matter, you will see that they’ve taken the path of law. They released a statement that, okay, we know the law we passed and that has been gazetted.

We’ve not seen any dissent for it. Most especially from us because our duty is only to implement the laws as passed by the National Assembly. If you follow Mr. President’s speech, he repeated the same thing by saying that we’ll follow the process in the implementation of law.

And to expand that further, of what purpose do we want to go and alter the law? To do what? Don’t forget the relationship between the tax administrator and that of the taxpayer.

It’s like the vineyard and the vineyard keeper. Because the more prosperous the taxpayers are, the better it is for us. So, we are not law enforcement agents that just want to chain our people down. That is the real essence of this reform, it is to stimulate economic growth because it is when the economy prospers that revenue administration has work to do.

Like I’ve always explained, and quoting Mr. President, that I’m not going to tax poverty. I want to tax prosperity. I’m not going to tax seed. I want to tax the fruit. So, I’m not going to just go and face investments. I only want to file a tax return. So, the only duty that we have, which Mr. President is leading, is removing all the odds in the face, or on the way of businesses: Remove that one so that businesses can do well which this tax reform actually forms part of.

 

But part of the controversy is that many people are saying they’ve not even seen the harmonised bills. Were you one of those persons who saw the harmonised copy of the bills?

That is the point I’m making. I don’t even need to see the harmonised bills. I don’t need to see any of those things. The only thing I need to see is the gazetted bills, which they’ve given to me. You know, all these processes are internal processes of the National Assembly which is purely separation of power. So, there is no way, we don’t have any duty, any role to play. Even when they discover something, they use their own institution to correct whatever they think.

It is not right and that is why I’m saying that I don’t want to focus on that. Our role is to implement the laws as passed by the National Assembly. That is what we are ready to do. Thank God, January 1st has come. The law has commenced. As Mr. President and everybody has seen it and the operational guidelines, everything is ready. The next thing I’m looking forward to is to start seeing the benefits.

 

There is another issue on the Memorandum of Understanding that you signed with the French government and Nigerians are saying, why are we involving France in our operations?

We don’t take it for granted, the level of awareness that Nigeria has shown now in the development of our country. Memorandum of Understanding is just operational items, operational activities that we do. Not only with France, we have with the UK, we have with South Africa, which is normal.

It is part of the whole law, and even the new law, that I need to facilitate the interaction between us and the global body for tax administration because the world now is a global village when you talk about international tax, international transfer pricing, because what is your cost here is another one’s revenue.

So, the kind of agreements and relationships we have is what we have both within the region and even in the continent. So, it’s like you are going against why Nigeria is part of the UN since it is a sovereign country.

We are not living in isolation and we did not open any of our data systems to any of these external bodies.

Here in Nigeria, unless you have a court order, you can’t take another person’s tax data because it is like medical reports. There is confidentiality, talk less of exposing that to international organisations. So, there is nothing to fear. It is a normal operational item that we do, not only with France but with all other global revenue administration.

 

One of the areas of controversy is section 39 sub section 3 of the Nigerian Tax Administration Act, which talks about competition. Now, in the version that the House is referring to, they say competition should be in the currency of the transaction. But what we have in the official gazette is competition in U.S. dollars….

No, let me just put more education into it and I repeat this, tax is a technical subject and requires experts. No section is written in isolation. Now, when they say competition, which is done anywhere in the world, should be in the currency of the transaction, what that means is that if your transaction is in dollars, the tax that you are going to pay will be computed based on that currency.

If the transaction is in Cedis, it should be in that Cedis, but in payment, one, if you have dollar, to pay, good. If you don’t have a dollar to pay, the law allows you to pay at the current exchange rate.  That is what you see in one of the reforms of Mr. President, the unification of rates.

If it has not been unified, that would have been a problem because if you don’t have that in the provision, which I know is the same thing that has been passed, the one I have, like I told you is from National Assembly, is that the transaction will be done in the currency, the computation will be done in the currency of transaction.

But when you want to pay, in case you don’t have the dollar, Nigerian currency is Naira. You just use the current exchange rate. So, these are technical things that have nothing to do with alteration.