CITN The Newsletter of The Chartered Institute of Taxation of Nigeria Vol.1 No.2 ISSN 1118-6917 Jan.-Sep. 2013

CITN Changes Leadership Baton Fiscal Fair Play Why some animals should not be pg more equal than others 04 Right Tax pg 19 Tax News: Tax Evaders Must pg go to Jail - Attorney-General of Lagos State 22 COUNTDOWN TO A PRESUMPTIVE pg TAX REGIME 32

Tax Administration & Adjudication: Focus on

JOINT TAX BOARD ...Creating a Tax Friendly Environment!

pg 08

T

pg 06

A AX

PPEA

L

&TAT JTB JTB

CITN SEEKS COLLABORATION WITH THE pg MEDIA THROUGH WORKSHOP 36 Accountant Sentenced for pg Fraud, Plotting Clients' Murders 37

Contents

COUNCIL MEMBERS 03

FISCAL FAIR PLAY WHY SOME ANIMALS SHOULD NOT BE MORE EQUAL THAN OTHERS

04

Vice President (VP) Somorin, O.A.,(Dr.)Mrs., FCTI

ONE ON ONE WITH ALH. YAHAYA MANA ABUBAKAR, THE COORDINATING SECRETARY OF THE TAX APPEAL TRIBUNAL

05

Deputy Vice President Ede, C.I., (Chief), FCTI

“...GIVE THE STATE BOARDS THE AUTHORITY TO PERFORM”

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RIGHT TAX

19

TAX EVADERS MUST GO TO JAIL - ATTORNEY-GENERAL OF LAGOS STATE

22

NO HOLDS BARRED

27

JAYEOBA BOWS OUT

30

COUNTDOWN TO A PRESUMPTIVE TAX REGIME

32

CITN SEEKS COLLABORATION WITH THE MEDIA THROUGH WORKSHOP

36

ACCOUNTANT SENTENCED FOR FRAUD, PLOTTING CLIENTS' MURDERS

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CITN INDUCTS 591 NEW MEMBERS

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APPOINTMENT & RECRUITMENT

40

Editorial Board

CITN CHANGES LEADERSHIP BATON

President Dike, M.A.C., FCTI

Immediate Editorial Board Members

Current Editorial Board Members

Chairman Eze, C, ACTI Ogbuanya,N. C. S., ACTI Ekpere, M. O., ACTI Ezeani, R.U., ACTI Hassan,A. A., FCTI Olowosile,O. B.D., ACTI Kandozie,J. A., ACTI Dahiru, S. M., ACTI

Orebote,O.A., FCTI Hassan, A.A., FCTI I Nwidobie,B.M., FCT Fowokan,T., FCTI CTI Olowosile,O. B.D., A Ayamba,K., ACTI Kudirat,A., FCTI

Editor-in-Chief Gbolahan Bilewu

CITN News is a Quarterly Publication of THE CHARTERED INSTITUTE OF TAXATION OF NIGERIA 4th Floor, Lagos Chamber of Commerce & Industry Building, Plot 10, Nurudeen Olowopopo Drive, Beside M.K.O. Abiola Garden, Central Business District, Alausa-Ikeja, Lagos. P. O. Box 1087, Ebute-Metta, Lagos State, Nigeria. Tel: +(234)01-7741273 Abuja Liaison Office: 1, Bechar St., Off Mambolo St, Zone 2, Abuja Tel: 09-6705066, 08060656493 Email- [email protected]; Website: www.citn.org

Honorary Treasurer (HP) Adedayo, A. I., FCTI Immediate Past President Jegede, J.F.S., FCTI Past President Quadri, R.A. (Prince), FCTI Members Simplice, G.O., (Ms.), FCTI Otitoju, A.O.(Chief), FCTI Da-Silva, G.A., FCTI Adeola, A.A., ACTI Olumegbon, R. A. (Mrs.) FCTI Disu, O.R., (Mrs.) FCTI Eze, C., ACTI Agbeluyi, S.O., FCTI Okoror, J., (Mrs.), FCTI Arome, W.E., FCTI Ohagwa, I.C., FCTI Bello, A.A., ACTI Gwaram, A.M., FCTI Ebilah, E. (Mrs.), FCTI Mikailu, A.S., (Prof) ACTI Bako, D.A., (Maj. Gen.) Rtd., FCTI Dakwambo, I., FCTI Representing the NUC Mainoma, M.A. (Prof.), ACTI Reprsenting the Chairman of FIRS Chuke, O., ACTI Representing Joint Tax Board Zakariyau, I., FCTI Representing Tertiary Institutions (Polytechnics) Ekwerike, M.F., FCTI Past Presidents Olorunleke, D. A., (Chief), FCTI Naiyeju, J. K., FCTI Okele, J. B., FCTI Aiyewumi, T. O., FCTI Balogun, A. A., (Mrs.), FCTI Osemene, E. N., FCTI (Late) Fasoto, G. F., FCTI Adigun, K. A., FCTI Quadri, R. A., (Prince), FCTI Jegede, J.F.S., FCTI Legal Advisers: Sanni, A.O., (Dr.) FCTI Sofola, K. S., (SAN), ACTI Kotoye, A.M., FCTI Ag. Registrar/Chief Executive Adefisayo Awogbade, FCTI

1985 1995 1997 1999 2001 2003 2005 2007 2009 2011

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1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

CITN Changes Leadership Baton M.A.S. Dike CITN President

The Chartered Institute of Taxation of Nigeria has elected new officers to steer the affairs of the Institute for the next two years. Following the successful conduct of the 21st Annual General Meeting of the Institute, the leadership baton of the Institute was officially passed on to Mr. Mark Anthony Chidolue Dike, FCTI, by Asiwaju John Femi Sunday Jegede, FCTI, who has immediately taken over the position of the Immediate Past President. Mr. M. A. C. Dike was unanimously elected the 11th President of the Institute at an Extra-Ordinary Council Meeting held at the Secretariat of the Institute. Other elected officers of Council included: Dr. (Mrs) Teju Somorin - Vice President, Chief C. I. Ede - Deputy Vice President and Mr. Adesina Adedayo who returned unopposed as the Honorary Treasurer. THE MAN, MARK ANTHONY CHIDOLUE DIKE Mr. Mark Anthony Chidolue Dike is a seasoned tax administrator and Chartered Accountant. He obtained a Bachelor of Science (B.Sc.) in Economics from the University of Ife, (now Obafemi Awolowo University) IleIfe, in the present day, Osun State. He also holds membership of both the Chartered Institute of Taxation of Nigeria and the Institute of Chartered Accountants of Nigeria. Dike has served in various capacities both within the Federal Inland Revenue Service and the Chartered Institute of Taxation of Nigeria.

Dike was the Assistant Secretary(Technical) and Secretary of the Federal Government Study Groups on the Review of Nigerian Tax System in 1991 and 2002/2003 respectively, Secretary, Tax Laws Drafting Committee (Federal Inland Revenue Service) and Drafting/Harmonisation Committee on Current Personal Income Tax Act in 1 9 9 3 , M e m b e r, Ta x L a w s Harmonisation & Codification Committee of the Federal Inland Revenue Service, Resource Person on Tax Audit and Investigation at the Commonwealth Tax Management Development Programme held in Accra, Ghana in August, 1995. He was the Class President Commonwealth Association of Tax Administrator (CATA) Regional Training Programmes for Tax Inspectors (1992) and the Advancing Management Potentials(2007). He was also the Class President of the Financial Investigative Techniques Inter Agency Tr a i n i n g P r o g r a m m e f o r F I R S Investigation Officers, NDLEA, Nigerian Police Force, INTERPOL and Central Bank of Nigeria. In 1997, he was nominated by the management of the Federal Inland Revenue Service as an official expert on tax practice of the Federal Government of Nigeria. He has attended several courses locally and internationally, travelled far and wide. These include: Study Tour to United States Internal Revenue Service in Washington D.C. USA, from 25th 26th March, 2009, Participation at a Course on Comparative Tax Policy and Administration at Harvard Kennedy

School Executive Education Programme from 20th June - 1st July, 2011 among others. He was also a co-opted member of the United Nations Sub Committee on Transfer Pricing. Mr. Dike has a wealth of experience spanning over three decades in the Federal Inland Revenue Service where he was at various times in the Tax Audit and Special Investigations, Oil and Gas, and until recently, Director of the Tax Policy and Legislations Department. Before his election as the 11th President of the Chartered Institute of Taxation of Nigeria, he had rendered services to the Institute including amongst others, Chairman of Students Affairs and Examinations Committee, Dean of International Taxation & Treaties Faculty, Oil, Gas and Solid M i n e ra l s Fa c u l t y, A n n u a l Ta x Conference Committee, Deputy Vice President, and as Vice President, he was a member of the Executive Committee (EXCO) of Council. Dike, is presently the Technical Adviser on Taxation to the Acting Executive Chairman of the Federal Inland Revenue Service, Vice President of the West African Union of Tax Institutes and the 11th President of the Chartered Institute of Taxation of Nigeria. He is a devout catholic, married with children and considers service as his watchword.

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Fiscal Fair Play: Why some animals should not be more equal than others By: Taiwo Oyedele, FCTI Partner and Head of Tax and Corporate Advisory at PwC Nigeria. The origin of the phrase “fair play” is largely credited to Shakespeare who coined the phrase and used it in several of his plays. Today the phrase is often associated with sportsmanship especially in many leading games like football and cricket so much so that some countries have incorporated it into their legislation. In sports parlance, fair play means properly conducted conditions for a game, giving all participants an equal chance.

When used in contexts other than games it means fa i r n e s s a n d j u st i c e . Therefore, one can say that fiscal fair play refers to properly designed systems w h e re e v e r y ta xa b l e person pays according to his ability and the tax revenue is applied judiciously for the benefit of all.

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There is no doubt that tax compliance rate in Nigeria is very low. According to the Heritage Foundation, the ratio of tax revenue to GDP in Nigeria is only 6.1%. This is within the range of countries with no income taxes such as the UAE, Bahrain, Saudi Arabia and

in fact, less than some war-torn countries like Afghanistan at 6.4%. At the other end of the spectrum are countries such as Denmark with 49.0%, France 44.6%, and United States 26.9%. In Africa some of the leading countries include Botswana with 35.2%, South Africa at 26.9% and Ghana with 20.8%. Various studies have shown that there is a high correlation between tax compliance and good governance as people who pay taxes tend to ask questions and hold their leaders accountable. This is due in large measure to the feeling that since they contribute to Government funding they have a stake in the way they are being governed. Therefore getting services from Government will no longer be a privilege to thank Government for but a right to demand from Government. This is why car owners in the UK sue their local councils for damages to their cars due to potholes. In 2012 alone more than 22 million pounds (over N5.5 billion) was paid in compensation to drivers for pothole damages to their vehicles and other related injuries. If things must get better the

people must know their rights. According to Thomas Jefferson, if a nation is ignorant and yet expects to be free, then it is expecting what never was and never will be. Fiscal fair play also demands that whatever the people want, they must be ready to pay for it. It is absurd to borrow from our unborn children to pay our bills but this is exactly what some Governments do when they amass debts to spend on frivolities, what a legacy! To be fair, the tax burden must be progressive so that the more you earn the more you are required to pay. For instance, if a poor man pays 5% VAT on bread a rich man should not pay the same rate on a private jet. The same principle holds for income tax on the basis that their ability to pay is not the same. The recent amendment to the Personal Income Tax Act failed to fully achieve this as it raised the tax on the poorest of the poor by 100% while reducing the tax on the middle class and slightly increasing tax on the rich. It is important also for everyone to contribute except those who have barely anything. This is essentially a determinant of the size of the so called “tax net”. Lagos State

Government, for instance said that only 3 million out of 8 million taxable adults pay taxes in Lagos State which is a little over 30%. If Lagos State has the highest rate of compliant taxpayers then one can only imagine what the average will be nationwide. To make any headway, the appropriate structures must be put in place to curb tax evasion. It should not be possible to register a company without first registering it with the tax authorities. In fact, the tax registration number should be an item on the certificate of incorporation. Enterprises should not be able to register their businesses without tax registration with the relevant State Governments. Natural persons should be registered for tax from birth. This will provide the relevant data to track compliance. Politicians must lead by example; it is immoral for a person who doesn't pay tax to seek political authority to manage tax revenue. Religious leaders and traditional rulers also must pay income taxes; the exemption in the law covers the religious institutions, not the individuals. Paying taxes is no longer just a legal compliance issue; it is also

about morality and r e s p o n s i b i l i t y. N o o n e understands this better at the moment than Starbucks. The company was accused of ag gressive tax avoidance scheme in the UK. As a result about 17% of its British customers decided to boycott the company's products forcing i t to p l e d ge a m i n i m u m corporate tax payment of $10 million annually. To assist willing taxpayers and encourage voluntary compliance, the tax laws and administration must be simple. Information about taxes must be f r e e l y a v a i l a b l e . Ta x administrators must be properly trained and must behave p r o f e s s i o n a l l y. D i s p u t e resolution mechanisms must be in place. Government must be prudent not extravagant or corrupt. The informal sector is another segment of taxpayers often talked about where tax evasion is rampant. Unfortunately, emphasis has been on how to get these people to pay tax whilst very little has been said on what is in it for them. The right strategy is the “carrot and stick approach”. It should not only be about tax to collect, it should also be about what the people

stand to benefit which should be concrete and compelling. To encourage businesses a company should be able to distribute its losses to its shareholders to reduce their taxes. Taxation can also be used to re d u c e co r r u p t i o n b y following the movement of money and taxing extravagant and ostentatious lifestyle. Fiscal fair play also demands that taxpayers' money be put to work and Government must be transparent. If Government tells people about the budget at the beginning of the year then they should equally be informed of the actual position at the end of the year before presenting another budget. In 2012 for instance, the Federal Government budget had a deficit of about N1 trillion but as it turns out, the FIRS collected over N1 trillion more than their budget for the year and oil price benchmark of $75 was exceeded with an average price for the year around $100 per barrel. Although not all the money collected by the FIRS goes to the Federal Government and not every additional dollar over the benchmark crude oil price goes into government coffers, fiscal transparency demands that this be openly discussed. Culled with permission of the Author from The Guardian newspaper of Monday, January 28, 2013 at page 61. Also available at www.ngrguardiannews.com (last visited on

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Alhaji Yahaya Manga Abubakar holds a LLB (Hons) certificate in 1987 from the prestigious Ahmadu Bello University, Zaria. He attended the Nigerian Law School between 1987 and 1988 and was called to Bar in 1989. He joined the service of the Ministry of Justice Sokoto/Kebbi State in 1989 and rose to the rank of Deputy Director, Civil Litigations after which he served as the Acting Director Legal Services in Kebbi State Board of Internal Revenue between 1996 and 1997. Between 1997 and 2010, Alhaji Abubakar worked with Kebbi Home Savings & loans Ltd as the Assistant General Manager/Secretary/Legal Adviser. In this exclusive interview with the crew of the CITN News, Alhaji Yahaya Manga Abubakar spoke passionately about the Tax Appeal Tribunal where he today occupies the office of the Coordinating Secretary of the Tribunal.

YAHAYA MANGA ABUBAKAR

Please, enjoy it.

Coordinating SECRETARY,TAX APPEAL TRIBUNAL

S i r, o u r r e a d e r s w i l l b e interested in your profile.

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My name is Yahaya Manga Abubakar. I was born on 27th May, 1962 in Zuru, Zuru L.G.A of Kebbi State. I attended Sokoto College of Arts & Science between 1981 and 1983 after which I proceeded to ABU Zaria where I secured a LL.B. (Hons.) degree in 1987. I attended the Nigeria Law School between 1987 and 1988 and was called to the Bar in 1989. I joined the service of the Ministry of Justice Sokoto/Kebbi State in 1989 and rose to the rank of Deputy Director, Civil Litigations and also served as the Acting Director, Legal Services in Kebbi State Board of Internal Revenue between 1996 and 1997. Between 1997 and 2010, I worked with Kebbi Home Savings & Loans Ltd. as the Assistant General Manager/Secretary/Legal Adviser. Currently I occupy the office of the Coordinating Secretary of the Tax Appeal Tribunal. I am married with five (5) children. How long have you been on this

seat? I was appointed on June 1, 2010. I have been in this role for about 3 years Should the TAT be regarded as an administrative, a quasijudicial or a judicial body and why? TAT is an administrative body because it was established as part of the dispute resolution mechanism. Though administrative, TAT could equally qualify to be a quasijudicial body because it adopts judicial procedures in arriving at its decisions. The Tribunal is not a judicial body. What are the challenges facing the TAT either generally or on zonal basis? G e n e ra l l y, a s a b u d d i n g institution, the TAT had teething take - off challenges. One, as would be expected, we initially had challenges in putting up relevant infrastructure for the take - off of the Tribunal.

Two, we a l s o h ave c h a l l e n g e s o f unpreparedness of the parties appearing before the Tribunal and requests for adjournments which has slowed the pace at which matters are disposed off. Three, there are some inhibiting legislations that need to be amended for the effective and smooth operations of the Tribunal. To w h a t e x t e n t h a s t a x stakeholders been patronising the TAT? We have had a very good response from the public. For instance, in the last quarter of 2010 when we took off, a total of 7 new appeals were filed in addition to the 133 appeals inherited from the defunct Body of Appeal Commissioners and Value Added Tax Tribunal; in 2011, 31 new appeals were filed; while 57 appeals were filed in 2012. Majority of these appeals were filed by taxpayers and the trend shows a good buy-in by the taxpayers.

Sometime last year, key officials of the TAT visited the CJN and sought for co-operation. In what areas have the judiciary been relating with the TAT?

that the Applicant jumped the stile or the hurdle, which is the Body of Appeal Commissioners by coming to the Federal high Court.

TAT has enjoyed a good working relationship with the Judiciary. The role of the TAT is to complement the giant strides of the Judiciary in the administration of justice in Nigeria. Specifically we have had collaboration in: I. Capacity building of the Tribunal members in oil and gas laws.

Many appellants have raised the issue of jurisdiction of the TAT especially in matters relating to companies income tax, which they claim that only the Federal High Court can exercise jurisdiction on such matters pursuant to section 251(1)(b) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). Do you think that there is a conflict between section 59 of the FIRS (Establishment) Act, 2007 and section 251(1)(b) of the Constitution?

ii. Additionally the courts have consistently pronounced and affirmed that where a statute prescribes a legal line of action for determining issues the aggrieved party must exhaust all the remedies in the law of (the Tax Appeal Tribunal for instance) before going to court. This judicial pronouncement has greatly strengthened the operations of the TAT. See the case of Eguamwense V Amaghizeuwen (1993) 9 NWLR (Pt. 315) 1 at 25 as per Belgore JSC where he stated that where a s t a t u t e prescribes a legal line of action for determining issues, be it administrative or matters of taxation, the aggrieved party must exhaust all the remedies in the law before going to court. This was recently emphasized by his Lordship (Justice Auta) in Ocean and Oil Ltd. V FBIRS (2011) 4 Tax Law Report of Nigeria (TLRN) when His Lordship struck out the matter for being pre-mature and held

It is imperative to use this medium to clarify that the Tax A p p e a l Tr i b u n a l i s a n administrative dispute resolution body and not in conflict with the Federal High Courts over jurisdiction on revenue matters. The Act establishing the Tribunal clearly states that appeals from the Tribunal shall go to Federal High Court while all criminal breach of the tax laws should be referred to the High Courts. The position of the TAT on this issue is exhaustively presented in the ruling of the Lagos Tribunal in Federal Inland Revenue Service V General Telecom. PLC (2012) 7 Tax Law Reports of Nigeria (TLRN) page 144 . The Tribunal held that “by virtue of Section 59

and the 5th Schedule to the FIRS Act, the National Assembly has set up an administrative tribunal with a limited jurisdictional scope and without inherent powers of courts.... Therefore, the Tax Appeal Tribunal is not a court of law within the meaning of Section 6 and Chapter VII of the Constitution and is not contemplated by Section 251 of the Constitution”. Like other advanced and developing tax jurisdictions all over the world, sound public policy demands the establishment of administrative tribunals like the TAT. Among other things, they help to reduce the caseload of the over-laden regular courts by providing less formal fora fo r q u i c ke r, c h e a p e r ex p e r t resolution of disputes in a specific field with respect to which speedy results are in the public interest. Paragraph 13(1) of the Fifth Schedule to the FIRS Act provides that a person aggrieved by any action or decision of the Service under the provisions of the tax laws referred to in paragraph 11 thereof may appeal to the TAT. Does the classification of persons aggrieved include State Governments or States Boards of Internal Revenue and Local Governments? If not, why? The 1 s t Schedule to the FIRS (Establishment) Act specifies that the TAT shall adjudicate on the following laws and the Tribunal limits itself within the provisions of the Act establishing it. 1. 2. 3. 4. 5. 6.

Companies Income Tax Act (CITA) Petroleum Profit Tax Act (PPTA) Personal Income Tax Act (PITA) Capital Gains Tax Act (CGTA) Stamp Duties Act (SDA) Value Added Tax Act (VATA)

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7. Taxes and Levies (Approved List for collection) Act

The following is the breakdown as at December 2012. Zones

8. Other regulations, proclamations, government notices or rules related to these Abuja Acts which are Lagos expressly spelt out in South-West the Fifth Schedule to North-West the FIRS South-South (Establishment) Act North-Central South-East The amended Personal IncomeNorth-East Tax (Amendment) Act 2011TOTAL

empowers the TAT to resolve disputes arising from the operations of the Act. Consequently, since the State Boards of Internal Revenue administer PIT at the State levels there are bound to be disputes and the TAT is empowered to resolve such disputes. On the other hand, when Government agencies such as Local Governments, etc. deduct Withholding tax or VAT from companies and refuse to remit, then the appropriate revenue authority such as the FIRS could bring such matters to the Tribunal.

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You will recall that Taxes and Levies (Approved List for Collection) Act, Cap. T2, LFN 2004 is one of the statutes listed under paragraph 7 of the First Schedule and referred to in paragraph 11(vi) of the 5th Schedule to the FIRS Act. Considering that rates, fees, charges, fines collectible at the Local Government level are also listed in this Act, does this mean that disputes arising from these collections can be appealed by aggrieved persons to the TAT? Though we have not had any case filed in respect of the Act you mentioned above, but when

Caseloa d inherite d June 1st 2010 23 34 15 10 14 11 16 10 133

New Appeals June 2010Dec. 2012 3 33 1 9 5 9 21 14 95

No of Appeal handled 2010Dec. 2012

any comes before the Tribunal, it would be considered on its merit viz-a-viz the extant laws. Will you prefer an independent Act to be enacted for the establishment, operations and remuneration of the TAT instead of relying entirely on section 59 of the FIRS Act’? We look forward to that because it would strengthen the Tribunal. Many stakeholders are doubting the independence of the Commissioners of the TAT considering that: (a)

they are appointees of the Executive arm of government, (b) they are sworn in by the Minister of Finance, (c) their remuneration is not as secured as members of the Bench in the judiciary. What is your take on this? The independence of the Tribunal is not in question. The law establishing the TAT made adequate provisions for its independence. The empanelling of the Tribunal with five members makes it difficult for

26 67 16 19 19 20 37 24 228

No of Appeals Conclud ed from 20102012 19 24 10 15 8 12 24 18 130

Caseloa d as at Dec. 2012

7 43 6 4 11 8 13 6 98

any external influence or undue interference. It is interesting to note that in some cases the Tribunal has given judgments a ga i n st t h e G ove r n m e nt . Funding has never posed any challenge as the members are promptly paid all their entitlements. What is your view on the allegation that TAT is an appendage of FIRS? It is important to correct this erroneous impression. TAT is not an appendage of the FIRS. The law establishing it is specific on the operations of the TAT. The Minister of Finance has a supervisory role over the

funding and operations of the Tribunal.

Would you prefer the

Commissioners of the TAT to be placed on full-time work basis or that the status quo should be maintained? I may not be in a good position to speak on that since I did not appoint them. Having either part time or full time members of the Tribunal comes with merits and demerits. However, with the increment of cases filed, it would be better to have some full time members so that cases could be disposed of quickly. In this era of resolving disputes through ADR, what forms of ADR, in the practical sense, will you advocate for the tax system? The Procedural Rules of the Tribunal provides for a flexible and efficient dispute resolution mechanism that would promote public confidence. The TAT in principle is a form of ADR and we factor this in all the processes and procedures of the Tribunal. The National Tax Policy was launched by President Jonathan on 5th April, 2012. Does this document have any significance to the TAT? The National Tax Policy has great significance for the TAT and the tax system in Nigeria. The policy document formally recognized the procedures and stages for dispute resolution on tax

m atte rs . T h e d o c u m e nt provides multiple windows for the aggrieved party to explore other alternative dispute resolution mechanisms such as the TAT before appealing to the court. In terms of application of ICT, is the TAT different from the ordinary courts in their manual approach to recording proceedings? From inception the TAT has adopted an automated recording of proceedings by installing digital audio recorders in all the zones of the Tribunal. We are upgrading the systems as part of our modernization process. Our vision is to go fully digital and implement a robust Enterprise Resource Planning (ERP) software that would integrate all our processes and operations real time and gradually facilitate an online filing of processes in the nearest future.

within 180 days from date of filing. We need the support of all the stakeholders to achieve this feat. Finally, we shall strive to be a leading tax dispute resolution centre of international repute, by providing parties with a flexible and efficient dispute resolution mechanism that would promote public confidence and voluntary compliance with tax laws

EDITOR’S NOTE: This interview was conducted just before the Commissioners of Tax Appeal Tribunal suspended sittings in April 2013 due to non - renewal of their appointments by the Minister of Finance. Their appointments have, however, been renewed by the Minister of Finance in June 2013

What other information about TAT will you like the members of the public to know? In order to facilitate proceedings t h e TAT h a s d r a f t e d a comprehensive case flow management procedure manual (the first by any judicial or quasijudicial body in Nigeria). One key performance indicator in the manual is that any appeal before the Tribunal shall be concluded

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Muhammed Lawal Abubakar

“...Give the State Boards the authority to perform” We are a team of the Editorial Board of the Publicity & Publications committee of the Chartered Institute of Taxation of Nigeria, publishers of the CITN newsletter. and it is a privilege for us to be here to speak to you on several matters concerning the Nigerian tax system considering your eminent position. But before we get into the nitty gritty, Sir, may we know your educational background? Thank you so much. My name is Muhammed Lawal Abubakar. I graduated from the University of Jos in 1985 where I read Management Studies with bias in Accounting. I have attended so many courses including a PostGraduate Programme. I hold an MBA certificate from University of Calabar. Where did you attend your secondary school, Sir? I attended Government Teachers' College in Mokwa, Niger state.

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You have been a public servant for more than a decade, the public would like to know your career

history. Yes, after my degree programme I went into the Nigerian Defence Academy for a Short Service Combatant course in Kaduna. In December 1986, I was commissioned into the Nigerian Army as a Second Lieutenant. I served in the Nigerian Army for a period of six and a half years. I left precisely in 1992 and joined the service of Niger State Government in December 1994 as a Principal Accountant. I served for three years with the Ministry of Finance and later I was transferred to Niger State Board of Internal Revenue where in the year 2000, I was appointed as the Executive Chairman of Niger State Board of Internal Revenue. I served in that capacity for a period of four and a half years. In June 2004 I transferred my service from Niger State to FIRS and since then I have been a staff of FIRS. At FIRS I served in so many departments. I was the pioneer head of Risk and Security Management department. I also started the Enforcement Department of the FIRS. At a point I was made an Assistant Director of Tax Policy

Department. Before my secondment to Joint Tax Board as the Executive Secretary I was a Tax Controller in Kogi State and that was my last post before resuming duty as the Executive Secretary, JTB. How long have you been in this position? I have been the Secretary of JTB nd since August 2 2010. In this position you have seen it all. You have seen the good, the bad and the ugly. Can we be led into this good, bad and ugly, let's start from the good. As far as JTB is concerned you may be aware that we are faced with constraints, the main constraint of the JTB if I may be honest is the inadequacy in terms of powers of the Board. If you check the relevant law, it is only in the Personal Income Tax Act in section 86 that JTB was created and is mentioned. So to that extent, you will see that there hasn't been much powers for the JTB to actually carry out the expected role of regulating tax administration in the country

where from the Act it is expected that the JTB will ensure uniformity and harmonisation of Personal Income Tax administration in the country. Additionally to offer advice on Tax Matters in Nigeria. To that extent efforts have been put in place. The immediate past Chairman of FIRS who was also Chairman JTB, Ifueko Omogui Okauru, made efforts in repositioning JTB by proposing a law where not only issues relating to human capital of JTB will be discussed, but also policy issues, general Tax A d m i n i st rat i o n a s we l l a s Regulatory power of the Board shall be confined therein. With that we still have current issues, as decisions taken at the JTB do not hold water. We agree decisions at m e et i n g s , o n l y fo r t h e members to go back and are u n a b l e t o exe c u t e t h e decisions. JTB is unable to sanction anyone who refuses to carry out agreed decisions though administratively we try to encourage ourselves as we are being looked up to by the public. Those are the challenges if I may say.

JTB is the initiative on the Tax Payer Identification Number project where in 2009, the National Economic Council and the Federal Executive Council approved the project. Implementation of the project will provide us an opportunity to have an electronic platform where Tax is essential. All the State Tax Authorities and FIRS will be at a common platform and they will be able to share information relating to identity of Taxpayers, both individuals and corporate. The project is on-going, right now we have 23 States that have fully rolled out electronic registration of Tax payers. It is expected that by the end of April we would have covered all the 36 states and FIRS. The essence of the TIN (Taxpayer

On the good side I will like to say that we have been able to carry the public along in all areas that have come up in recent times. For example, we have been at the forefront of getting some of the amendments to the existing Acts. In conjunction with FIRS we have been able to push for amendments to Companies Income Tax 2007 and recently Personal Income Tax in 2011. We have also been able to educate the public through our publications in the media. We have been able to sensitize the public on Tax issues. One of the important achievements of the

Identification Number) project is to ensure that we have all required information about Taxpayers. This information is put in such a way that important stakeholders' interests in the Nigerian economy are embedded in the project implementation. For example, customers in commercial banks will be required to have the TIN before they open new accounts. Existing customers will be required to update their accounts with TIN.

before obtaining International passports. TIN is also required for drivers' licence processing. The Nigeria Customs Service will also request importers to fill their Form A, adding in their TINs. The e s s e n c e o f t h i s i s to get information, although Taxpayers were sceptical about the project at inception as they saw it as an evasive tool from the Government to obtain individual income amounts. With the TIN a bank customer's records can easily be verified especially income earned during the year. If the information is shared with the Tax Authorities it will be difficult for a customer to hide from paying the right taxes. Those are areas where we will collaborate with these institutions and it will help our economy as we focus on Tax revenue as against total dependence on oil revenue. You just spoke about a certain law earlier that will enable JTB have 'some teeth' so that they can bark and bite. Is this law before the National assembly? What is the name of the law?

As we move on, the Nigerian Immigration Service will also request citizens to provide TIN

It's a work in progress. A committee has been set up to work on this. Members are drawn from the Tax Policy department of the FIRS and from the JTB. It is to provide for the establishment of the JTB where powers and functions will be spelt out and more focus on regulatory work. Penalties will be spelt out clearly, just like you have the Financial Reporting Council of Nigeria and such other organisations. How soon shall we be expecting the bill to be sent to the National Assembly? We have a draft copy which will be exposed to the members at the

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next meeting and thereafter it will go back to the committee for clean-up and will follow due process to be passed on to the National Assembly. Without being pessimistic, how can such a law cross the hurdle of Fiscal Federalism? That is another issue because lawyers have also warned that except you restructure the Membership of the JTB, if an Institution has a posture of Federal Character it is different from that which seems to be that of National Character. Except you want to call it a National Joint Tax Board which will be different from the Federal established names. If it is National it means that it goes down to all the 3 tiers of Government and not seen as a Federal entity. To that extent the appropriation in terms of funding will now be at the National Assembly, it also means that States have jointly contributed to its funding. So the way it is structured now that is why we have problems in controlling States especially when the State on its own will go to the State Assembly to create a law to enable it collect a levy or fund. This is because the provision of the Constitution allows such practice. So we may see ourselves requiring proper guidance in seeing that other aspects of our structure especially as a nation is taken care of.

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Thank you Sir, we visited the JTB's website for information concerning the Tax system which includes the communiqués of JTB, achievements of the TIN project and we discovered that the information on the website is not only scanty but cannot assist an

investor to make a Tax decision. Why?

collaborating Institutes. Is this an oversight or deliberate act?

Thank you Sir, I think I will have to admit to that. It is not deliberate; we have been working on improving the site. Most times even though it's not an excuse for example, we have had people come to request for Internally Generated Revenue figures from the State. What we observed mostly is that we have conflicting figures. If you check the National Bureau of Statistics for IGR figures you will discover that the figures you get will not agree with Revenue Mobilisation and Fiscal Commission. You will be more confused if you go to the Office of the Accountant General of the Federation where figures have been provided from the State, as a result of these problems sometimes we are cautious of posting some information on the website. As I said it's not an excuse as other important information have been posted to guide investors. We have improved in that regard.

No. CITN to me is one of the backbones of Tax Practice in the country. It should be out of place to say that you can succeed in Taxation in Nigeria without carrying CITN along. I think if anything like that happens it should be an oversight. I know personally how much I championed the process of getting CITN admitted into the JTB. Right now we are giving CITN observer status, up till 2010 applications came but not only CITN but other professional bodies were turned down for admission as members of JTB. A lot went into ensuring that CITN became a member of JTB. The reason for this is not far -fetched. You know very well that having members of CITN in JTB can do a lot in what we do in terms of improving the need of the State Revenue Boards, in terms of technical issues that will come up during our meetings. This you would have seen in the last few months now we have CITN on board. We have also examples of their members that were sent to us who work with our editorial board. We have CITN members wo r k i n g i n o u r Ed u cat i o n Committee where we look at the curriculum and work on essential improvement required in our course content for training programme for members. So CITN is a strong partner of JTB as far as we are concerned.

How soon should stakeholders expect a fundamental change in the information management as it relates to your website? There is a general restructure in the JTB, we are collapsing the present structure because like the TIN project at the end it will have to be absorbed as business as usual in the ICT unit of the JTB after implementation. We are also trying to ensure that our capacity in terms of personnel is improved. Ve r y s o o n y o u w i l l s e e tremendous changes in that regard. We also discovered that CITN was not listed as one of your

OK Sir, does it bother you that Taxation is yet to be a discipline in Nigerian universities and do you think the efforts will go far when taxation is yet to be a discipline in our educational system at tertiary level?

The tertiary institutions we have in the country have not demonstrated any effort in developing Taxation in the Country. For example even students of Accounting and Law in universities will only take a course in Taxation. You will be surprised to see even the content of the course is not more than teaching the elementary parts of Taxation, for example 'what is selfassessment?. No effort is made on the updates to existing laws; no effort is made to find out what is happening in other Jurisdictions in order to grow students right from the University. So there is a very big gap there. Only of recent did Madonna University, a Private University, receive an approval to run Taxation as a Degree Programme. Bayero University has also made an application to National Universities Commission to introduce Taxation as a Degree Program. By and large I feel that in granting such approval to Universities, it is Institutions such as CITN and JTB that would need to be deeply involved in drawing up the curriculum. I would like to give an example of the Institute of Taxation of Malaysia who work from the undergraduate curriculum in Universities who are taking Taxation as a course. T h e I n st i t u te a l s o r u n s a Programme which is almost equal to a Degree and also run PostGraduate Certificates (Diploma in Taxation). I would advise that as the Authorities are planning to allow the Universities to run courses in Taxation, CITN and JTB and other relevant bodies involved in Tax Practice should be involved in drawing up the curriculum so that the goals would be achieved.

Don't you think that the JTB should send a position paper to the National Universities Commission to communicate this? I think it is very important and what we have been doing at JTB is working within the past years to create a Tax Academy based at Gwagwalada where FIRS secured a place. FIRS and JTB are working together for this purpose. The aim is for the Academy to run courses in Taxation in the future. This has affected the push by both FIRS and JTB in going to NUC to grant approvals. FIRS and JTB have to be up to speed so that when NUC grants approval to Universities it will be able to monitor what they give out as degrees in Taxation. Will the Academy be similar to what we have in ANAN (Association of National Accountants of Nigeria) with the Nigerian College of Accountancy in Jos? Well, yes and no because the Academy will have a greater involvement from Government as against ANAN Academy in Jos so I think that will be a major difference.

list for collection) Act. That Act c a m e i n t o p l ay t o t a c k l e challenges of problems of multiple taxation. That is why if you go into the schedule of the Act it's spelt out as taxes collectible by each of the 3 tiers of Government. That notwithstanding what we still experience today is taxes and levies coming from different places. We had a discussion recently where we were surprised to hear of some funny taxes previously unheard of before, for example Business Landing Permit. The Local Government officials (agents or consultants) tax owners of a new business with this levy. The LG officials say if you don't pay it you are in trouble. Other types are movement permit, air pollution levy and carbon tax. You have a State that wants to improve its tourism industry and all they need do is to send a Bill to the House of Assembly to create a law that states that a 5% tax on tourists' transactions will be placed on tourists who visit the State. It has been condemned by taxpayers, stakeholders, consultants and professional bodies alike.

Sir, JTB has emphasised so much on the evils of m u l t i p l e t a xa t i o n i n Nigeria. Yet the incidence of multiple taxation seems to be worsening instead of abating. So what is JTB doing practically to end this? The issue of multiple taxation has been with us for a very long time. In 1998 it came to a level that the Government was so concerned it had to come out with a law and that is what got us back to the Taxes and Levies (Approved

The good news is that Government through the National Economic Council set up a Committee, to look into problems of multiple taxation. About 3 months ago we involved the

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police to check where these illegal acts are carried out. This was done by going around the country on the highways, for example traders moving foodstuff from one place to the other are faced with illegal taxes. The police helped to dismantle some of these illegal road blocks created for Tax collection. As I said the NEC set up a committee to look into all issues concerning multiple taxation. States that have created laws that are outside this approved list of collection, will collect such laws and then see how they relate to the existing law. At the end what we want to do is to review to minimise multiple taxes. What we have recommended are short term and medium term measures. The short term measure is for Government at State level to look at such marked tactics and see how they can reduce them or harmonise them to be in line with Taxes and levies (Approved list of collection) Act. For example you have states that have introduced Consumer Tax or Sales Tax whereas you have Value Added Tax that means the same concept. Such States would be told to go back and have a second look so t h at t h ey ca n h a r m o n i s e , especially if it's the same as a previous tax.

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Some States decide to go for a s h a r i n g fo r m u l a fo r taxe s collected between themselves and Local Government. The medium term measure is to have a review or amendment of the existing tax laws, The Chief Executive of the States have been advised to check the excesses of some Local Government activities in terms of collecting taxes or Levies. Thank you Sir. Many states’

internal revenue boards are not autonomous. Some are autonomous while others aren't. Members of the public will want to know how to separate them and what JTB is doing to persuade the Governors who have powers to liaise with the State Houses of Assembly to grant this autonomy. If you talk about autonomy to Tax Authorities you want to look at it from two perspectives. One is the financial autonomy. Second is autonomy in terms of administration where the Tax Authority may be allowed to hire staff on its own without going to Civil Service Commission or handle issues relating to promotion , retirement etc. You also need to look at the structure we have in place, I'm talking about States. States that mostly would be paid from Federal Government allocation so there is that quest for States to adequately harness their IGR. To do that we need to empower the State Revenue Boards. Let us give the State Boards the authority to perform. However we are happy today, because gradually States are beginning to grant autonomy to their Tax Authorities. If you want me to cite specific examples I would use Lagos State that has granted autonomy to Lagos Internal Revenue Service (LIRS). Cross Rivers, Benue and Bauchi have given autonomy to their State IRS as well. Rivers State to some extent has also granted autonomy to its Revenue Board. Gombe is working on its law to allow its Revenue Board to be autonomous. Niger has its bill ready to be passed on to the State Assembly. Kaduna has gone far and has what is known as partial autonomy in terms of operations and funding. In all these, what is

important is funding because when you talk about autonomy the emphasis is on funding. FIRS for example, got its autonomy by establishment of its Act in 2007 and what you are witnessing today in FIRS is part of the result of that Act where the FIRS on its own could hire people without going to Federal Civil Service Commission. FIRS are also allowed to retain 4% of its collection because of administration. Likewise States that have been granted autonomy can retain 5% as cost of collection. One important thing that we have encouraged States Revenue Boards to do is to implement the position of the Personal Income Tax Act that provides for at least 5% IGR collections from the State to be utilised by the Revenue Board. That actually has not gotten across to the States. We have been drawing the attention of the authorities to that. On the other hand we are also encouraging the State Revenue Boards to live up to expectation. They say to whom more is given more is expected. If you expect that States should give you 5% of your collection then you should demonstrate that you are out to improve on your collections. I think it's a 2-way thing, while you call on State to give autonomy you also call on the Tax Authority to improve on their collections. This brings us to ask you the relationship between the JTB and the Nigerians Governors' Forum (NGF) because these State Boards of Internal Revenue cannot do much without the cooperation of their governors, so how is the relationship? The JTB in its structure has different members including the

State Revenue Boards. The State Revenue Boards are bodies owned by States. The Executive Governors have the power to appoint the State Revenue Board Chairman. We have strong working collaboration with the NGF, for example the TIN which is on-going was actually approved at the NGF. They agreed that they need to have a common platform where information about Taxpayers will be shared among members and in terms of advice the JTB has given advice from time to time to the Secretariat of the NGF in Revenue generation initiatives. For example in 2010 there was a joint workshop by the NGF and JTB and very soon we will be working on a nationwide sustainable workshop in Taxation jointly with the NGF. Thank you Sir, in this light what is the relationship between the JTB and FIRS? FIRS is a member of the JTB but the provision of the Personal Income Tax Act states that the office/secretariat of the JTB should be provided by the Federal Government through the FIRS. The running costs and all other capital projects of the JTB are to be shared between the Federal Government (FIRS) and the States. What we have right now is 50% of the JTB are funded by FIRS while the 36 states put together and other members of the JTB fund the remaining 50%. What is the relationship between the Tax Appeal Tribunal and the JTB? The Tax Appeal Tribunal is a referral point if we are unable to resolve issues between Taxpayers and Tax Authorities. The Personal

Income Tax Act and the FIRS Establishment Act recognise the need to go to Tax Appeal Tribunal with disputes regarding Taxation in the country so to that extent we collaborate strongly with Tax Appeal Tribunal. During the Senate hearing on the propriety of the increase in the cost of obtaining/renewal of number plates, and obtaining and renewal of new driving licences by the Federal Road S a f e t y Commission the FRSC gave reasons for the increase to include how percentages of the cost will be shared among JTB, the state boards of interval revenue and the FRSC. A lot of Nigerians were angry with the prescribed fees especially when the Nigerian Police pegged its own cost of Biometrics data licensing at N3000. What should Nigerians believe? First of all we need to correct the impression that the proceeds from sale of number plates and drivers' licence are to be shared. From the angle of Revenue Boards they are revenue to the States. They are road taxes to the States and by definition of taxes if it is imposed it becomes compulsory. For example you need a licence from the state to drive on the road or road taxes to put a car on the ro a d a n d a c e r t i f i cate o f roadworthiness to show your car is roadworthy. From FRSC's perspective the law has empowered them to design number plates and drivers licence,

for uniformity. In doing this they had to incur costs which have to be re-imbursed. So it was not sharing but a component of their production costs that were being paid out of the sale of the items. The increase of cost by FRSC was due to the security additions of both the license plates and the drivers licence. Readers have been inserted in the license plates and drivers licence so that all information about the owner can be read without the driver giving yo u s u c h information. You have to also note that some of these fees have remained static without any upward review so at JTB we agreed that there should be a little upward review of the revenue coming from road taxes. Putting the two together the revenue and the cost of production will have that change in the purchase of the drivers licence and number plate. As you said there was a public outcry and National Assembly needed to intervene by way of first advising the FRSC to suspend the production and sale of the number plates. The road taxes if you check the relevant laws are issues that relate to States entirely. They are not federal taxes. Some States thought that they could not wait for National Assembly to tell them not to sell number plates but those are areas we do not want to discuss because you cannot succeed when it comes to issues affecting States and Federal interests. We advised that they should suspend and comply with the directive given by

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National Assembly and listen to the public outcry. That is why it was suspended until a downward review came up and we returned to advise the states to reduce their revenue from the road taxes. The suspension has thus been lifted and what we have now is the services that are being sold to the public.

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FIRS vehemently opposed the FCT Internal Revenue Service Bill 2012. Where does JTB stand on this matter? Well I think I can speak to some extent on behalf of FIRS. FIRS as you know is a member of the JTB, and the Chairman of FIRS doubles as the Chairman of JTB. So it's a common position that JTB & FIRS submitted to National Assembly but it's not that FIRS or JTB objected to FCT IRS Bill 2012. That is not the position. A copy of the bill was sent to both JTB and FIRS and we called for a Technical Committee meeting where we looked at the positions. Now JTB as a body is not against the passing of the Bill but the contents of the Bill are what we advised must be reviewed. For example, the Bill provides for collection of PAYE of residents of FCT. You and I know that, which is provided for in Pe r s o n a l I n c o m e Ta x (Amendment) Act 2011 and it is to be administered by FIRS. So lawyers are advised that as you are coming out with this law, other laws need to be amended. You may look at it jointly and do the same thing at the same time. To remove confusion JTB had to draw the attention of the authorities to areas of the Bill which had been represented in an earlier Bill or Act. Another Bill they had, was the FCT Property Tax Bill. It depends also

on the concept and what they want to tax. If it will clash with tenement rates for example, will it not be necessary to look at what has been provided for in the existing law that has tenement rates for Local Government? we have to compare it with what we had in previous law which had tenement rate for Local government. If the board will be empowered to jointly collect tenement rate and property tax, then what income will those taxes come from? The input we sent to National Assembly is to draw its attention to grey areas as far as the Bill is concerned. The way they run now is to have a department of revenue which functions as a board. That is our take on that. There has been sensitisation of the possibility of the amendment of the VAT Act. Two of the proposed changes include the increase of VAT from 5% to 10%. Secondly is the shrinking of the VAT exemption list. What is the position of the JTB on these proposed changes? I n M ay 2 0 0 7 t h e Fe d e ra l Government made attempts to review the VAT upward from 5% to 10%. It was rejected because first it was thought that it didn't pass through the normal procedure of amending the position. National Assembly kicked against it. The public also said it was being forced down their throats. Talking like a tax man I would say that it's an indirect tax and we have also agreed in our National Tax policy that we want to deemphasise our efforts in improving revenue through direct taxes. We will lay more emphasis on indirect taxes which suggests that we will have to look at the rate of VAT against what we have today.

On the other hand, direct taxes such as Company Income Tax were thought to come down from 30% to a lower rate. Till date that hasn't changed from 30%. So why are we rushing the other one (VAT)? We need to look at the National Tax policy which guides all our policies. Now we say there should be equity, fairness, clarity, stability among people of all income levels. Because of that we reduced the tax burden on individuals in 2011, so that they can have more money in their hands. For example if you smoke a cigarette we have increased the rate of VAT from 5% to 10%, so the decision is left to the individual. Authorities felt that since the principle was used within Personal Income Tax, it can be tried with VAT. Looking at the Nigerian situation, personally I may want to recommend a multiple rate of tax, but our low level of literacy. If you put different VAT on different products some business men may want to manipulate the system. The environment is so harsh. The business man complains that he provides for his entire infrastructure (water, electric power, road , diesel, etc.) and questions why he has to pay so much. What is the money used for? It's a question that all of us need to answer because as we are going out to collect revenue we are being challenged by taxpayers who say ,'you come here every month/year, we pay you and in return what we get is limited'. That is why we give feedback to the authorities to let them know the challenges we have faced.

In the implementation of the aspect of the National Tax Policy shifting from direct to indirect taxes, are you worried that the emphasis is on increasing the rate of indirect taxation whereas the direct one is not being reduced in a proportional manner. Don't you think it will be oppressive and defeat the very essence of that provision in the National Tax Policy? The authorities are talking about a review; even CITN has submitted a position. I'm aware Sir that the Companies Income Tax Act (Amendment) Bill 2011, being sponsored by Senator Andy Uba contains nothing of such. That is where I want to come in. It's one thing for a parliamentarian to table a bill and it's yet another thing for other stakeholders to make input to it. It's not as easy as it seems. You as a lawyer will know it takes time as it has to pass through the relevant stages before it becomes law. The bill will be exposed to committee level, professionals and public hearing before all the issues are addressed. I know very well that there is movement. With regard to the National Tax Policy I don't think there is a problem with the policy as it is now, it's just for us to d e m o n s t r a t e i t a s Ta x Practitioners and Administrators and reflect it in our laws. It's been a very nice moment; I just think we should have a message for taxpayers. What message will you want to pass on? I would like taxpayers to improve on their own in knowing what their obligations are as ignorance

isn't an excuse in law. On our part we will do our best to educate our tax payers. I would expect our tax payers to know issues relating to date breaks on filing returns. Our main issue with taxpayers is when they want to collect tax clearance certificates and they have to pay for the service despite not doing business under the period in review. Due to the fact that the relevant forms aren't filled at the tax offices they will have to pay for the service, which becomes an issue. Penalties are charged for not following the procedures to file accounts as at when due. We shall continue the on-going exercise of educating and updating tax payers. What message do you have for CITN members? I am also a member of the CITN. CITN need to reposition its members in such a way that they will assist the taxpayers. We want to see a time where tax practitioners are involved in taxpayer education, involved in preparing correct accounts for tax purposes, involved in local chapters to organise enlightenment programmes for the public. CITN should open its doors to other related bodies such as ICAN, ANAN. Sometimes people who are not in the field of accounting or taxation view the other side as enemies. It should not be so. From the pages of newspapers I know some people would be happy that ICAN and CITN are in court but I know that is history now. Efforts should be made to bridge the gap between accounting related fields and nonaccounting related fields.

T h a n k y o u , S i r, w e w i l l communicate your message to the Authorities. Any message for the State Boards of Internal Revenue? Yes my advice for the State Revenue Boards is to improve on their human capacity to develop. They cannot achieve adequate tax administration if you do not have good hands in that regard. So I would advise that the boards employ professionals in order to achieve their aim of improving revenue generation. What message would you give to FIRS? FIRS is at the driver seat in terms of revenue generation in the country. FIRS should focus more on improving on VAT. It is observed that there is still a big gap in the administration of VAT,

likewise Companies Income Tax. We have noticed that non-oil revenue generation is still at a lower percentage than oil revenue generation; this has to be improved upon. Even though a foundation is in place, I also like to see FIRS improving efforts in a u to m at i n g i t s o p e rat i o n s through ITAS (Integrated Tax Administration System). If we achieve that so many things will improve, for example Tax refunds

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can also be claimed at the airport when returning from overseas once the platform is well integrated. All you have to do is show your purchase receipts and you are given your refunds, when applicable. There is a problem I saw recently. Someone will be given a form and asked to fill in a Taxpayer Identification Number, though the person doesn't own a company. What should he/she fill in that space? The TIN is meant for individuals as well as corporates. If you are to fill the TIN for individuals not all fields are compulsory, so you skip those not compulsory. The asterisked fields are the compulsory ones in the form. Individuals as of today do not have taxpayer Identification Numbers in Nigeria No they have. How can I find my own as an individual?

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As an individual now we have about 23 states that are giving out TINs. As an individual you go to designated areas to request a TIN. Your name and other information for example your residence will be required, which is very important in Personal Income Tax. Once you fill whether with your Federal Inland revenue and you are a taxpayer with a state board what it means is that your records will be automatically transferred to your state board where you reside. The state will have jurisdiction over your records.

Lagos State has what you call Payer ID which is used in place of TIN, why? Payer ID will soon be integrated with TIN. We are already collaborating with Lagos State. They will not push aside the registration they have done; rather the holders of that card will be required from time to time to update them to reflect with TIN. What will happen now is that at i n c e pt i o n t h e i nfo r m at i o n pertaining to people that are holding Lagos State payer ID may not be able to share information with tax authorities as the information is not on the TIN platform for now. We are working towards integrating them, not only Lagos but all other states of the federation. So only those that pay to FIRS can say “yes, we have a TIN?” No even those that pay to states. Both FIRS TIN and all state TINs have a common platform and are integrated. But as at today Lagos State is not part of that platform Very soon, we are working towards that platform.

are not even abreast of tax issues, you find a director in the accounts department who does not know what percentage to apply when deducting relevant taxes. I will call on such officers to come up and relate with relevant bodies so that they improve on their capacity and job schedules When you eventually leave office how do you want to be remembered ? I want to be remembered for the restructure which we are working towards in the JTB. So that you leave a legacy that will enable whoever is coming on board to be able to work on. Where there will be less confusion around who does what. Today there is confusion where a new tax or levy is introduced without people being aware. I want JTB to bring all relevant tax authorities together and ensure that everyone is dancing to the tune of existing statutes as far as tax is concerned in the country We are most grateful Sir. Thank you. I think we are better informed now You are welcome. I am happy to be associated with the good work you people are doing at CITN.

Sir, a message to your admirers. Well I want to humbly say I do the little I can in improving Tax Administration in the country. We also want to see a situation where we educate not only the taxpayer in the business sector, but our colleagues who are accountants in the Ministries. Most times they

EDITOR NOTE: This interview was granted in March 2013.

Right Tax Compiled by Olumide Bidemi Daniel, ACTI

Ans:

1.

Ms. Omotayo from Lekki Phase 1, Lagos asks: Why are Citizens required to pay tax?

Ans:

Citizens are obligated to pay tax because taxes are the price we pay to be part of a society. It is how the society, through the Government, collects the money needed to fund the services and benefits that it provides to everyone. Services and benefits such as security (police and the military), roads, courts, schools, support for the needy, research in medicine and science, education etc. require significant funding. It is the revenue generated form taxes that cater for these societal goods. Everyone is required to pay tax in one form or another, mostly as income and sales tax. There are many services offered to the citizens which can not be managed effectively under any other system. Thus, the government uses your taxes to support health care, security, national defense, housing and other basic amenities for the benefit of the general public. We can all admit that these services are necessary; hence each person would have to contribute to the provision of the services according to one's income and earning capacity.

2.

Ms. Ahmadu from Parkview Estate, Ikoyi, Lagos asks: Will a company be required to pay tax after it is declared bankrupt?

To the extent that an insolvent (bankrupt) company does not make profits, it will ordinarily not be liable to pay the primarily applicable companies income tax. Note however that it may still be liable to pay a minimum tax in appropriate circumstances. The fact that a company is insolvent does not mean it no longer exists. More often than not, such a company will be ordered by the Court to be wound-up; that is, its assets will be sold to satisfy all its liabilities. The taxes owing and due to government are first line liabilities that have to be satisfied even before other liabilities such as the salary of employees.

3.

Mr. Adeyeye from Ondo Town, Ondo State asks: Can I go to prison for not paying tax? Yes; none payment of tax, also known as tax evasion, is a serious offence that often meets with terms of imprisonment in addition to the payment of penalties and interests.

4.

Ms. Martins from Surulere, Lagos State asks: What are the parameters for determining the amount of taxes to be paid? The sum of money to be paid as tax is easily calculable by applying the rate of tax as provided for by law to the object of the tax (which could be, income, profit/gain, value of goods) which is also adequately described by law.

5.

Mr. Ayodele from Ayobo, Ogun State asks: Can an individual choose to pay a fixed sum as taxes in spite of one's income? No; taxes are expressly required to be paid by and in accordance with the law. For instance, the rate that is applicable to a typical individual's income has been set out in the Personal Income Tax Act, and it will be wrong

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Continued on page 22

L-R: Mr. MAC Dike, President of the Chartered Institute of Taxation of Nigeria, His Royal Highness, Oba Gbadebo Okukenu IV, the Alake and Past President T.O. Aiyewumi presenting an award plaque to the Paramount Ruler of Egbaland, and Dr. (Mrs.) Teju Somorin, the Vice Executive Chairman of the Lagos State Internal Revenue Service at the President, during the visit to the Royal father recently at Abeokuta Annual Dinner and Award Nite of the Institute

Fellowship Awardees taking their Oath of Allegiance at the Annual Dinner and Fellowship Award Nite

Asiwaju J.F.S. Jegede presenting a gift to Mr. Momoh Yussuf, one of the longest serving staff of the Institute

L -R Fmr. Executive Chairman, Ikot Ekpene LGA, AKS - Hon. Pastor Sunny Ibuot, FCTI,Permanent Secretary, State Budget Office, AKS - Pastor Nicholas Ekarika, ACTI,Akwa Ibom State Governor Representative,Hon. Commissioner for Finance, Mr. Bassey Albert Akpan, ACTI, CITN President, Asiwaju John Femi Jegede, FCTI and his Wife, Fmr. Executive Chairman, Nsit Ibom LGA, AKS - Hon. (Elder) Joshua Eyo Asuquo, FCTI

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Group photograph of participants at the Ibadan MPTP

Condolence visit of the leadership of the Institute to the Executive Governor of Lagos State, Mr. Babatunde Fashola, FCTI, SAN, over the death of his father, Alhaji Ibrahim Ademola Bayo Fashola

Visit of the Annual Tax Conference Committee to the Corporate Office of BusinessDay Limited

The Immediate Past President, Asiwaju J.F.S. Jegede, address the Third Special Session of the Conference of the States Parties to review the operation of the Chemical Weapons Convention in Geneva

Visit to the office of the Secretary to the Tax Appeal Tribunal in Abuja by the Editorial team of the CITN Newsletter

A group photograph of the leadership of the Institute with the Attorney General and Minister of Justice, Barr. Mohammed Adoke, SAN, in Abuja

The leadership of the Institute listening to the main consultant at the construction site of the Tax Professional House

Construction work on the site of the Tax Professional House

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Group photograph of participants at the Seminar on Transfer Pricing in Lagos

for the individual to, without regard to the rates, pay a fixed sum. Please note however that in the application of the Pay As You Earn (PAYE) system of personal income deduction and remittance, the tax authorities may have agreed with an employer, a fixed monthly deduction to be made from an employee's monthly salary with the understanding that any overpayment or underpayment will be reconciled with the employer at the point of filing the annual PAYE Tax Returns the statutes and must be paid in accordance with the relevant statutory provisions. 6.

Mr. Azih from Enugu, Enugu State asks: What is the difference between tax avoidance and tax evasion? Tax avoidance is generally the legal exploitation of the tax regime to one's own advantage, to attempt to reduce the amount of tax that is payable by means that are within the

law whilst making a full disclosure of the material information to the tax authorities. Examples of tax avoidance involve using tax deductions, changing one's business structure through incorporation or establishing an offshore company in a tax haven. By contrast tax evasion is the general term for efforts by individuals, firms, trusts and other entities to evade the payment of taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their liability, and includes, in particular, dishonest tax reporting (such as under-declaring income, profits or gains; or overstating deductions). Tax avoidance may be considered as either the amoral dodging of one's duties to society, part of a strategy of not supporting violent government activities or just the right of every citizen to find all the legal ways to avoid paying too much tax. Tax evasion, on the other hand, is a crime in almost all countries and subjects the guilty party to fines or even imprisonment.

Tax News

Tax Evaders Must go to Jail - Attorney-General of Lagos State

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Mr. Ade Ipaye, the Attorney-General and Commissioner for Justice of Lagos State, on Tuesday, January 15, 2013 disclosed that the State Government would no longer treat tax evaders with kids' gloves as cases will now be made out to ensure that they serve jail terms apart from the payment of fines. He highlighted the statutory jail terms that ranges from 6months to 3years while also noting that it is actually not the intention of the State Government to jail its residents. He however stressed on the overriding need of the Government to ensure that residents of the State are alive to their fiscal responsibilities to the State. Ipaye expatiated on the efforts the State had made since 1999 at fine-tuning its tax system. He noted

that, the State had in the recent past done its due in enlightening the public on the essence of tax payment and it is now at the phase of enforcement. Towards this end, the State Government will be prosecuting individuals as well as companies and has already obtained the nod of approval of the Attorney-General of the Federation for this purpose. It was disclosed that the State Government had reported over 14,000 suspected tax evaders to the Police which had invited them to make statements. The government said the invitation will precede the institution of criminal proceedings against them. It was however revealed that the Lagos State Government had filed no fewer than 238 court

cases against companies and individuals for default in the payment of taxes. Culled from, The Punch Newspaper of Wednesday, January 16, 2013 at page 6. Also available at: http://www.punchng.com/news/lagos-sues-238firms-others-for-tax-evasion/ (Last visited on: March 26, 2013) FIRS hit N5 Trillion in 2012 … non-oil Revenue accounts for over 36% The Federal Inland Revenue Service (“FIRS”) in a statement issued by its Director of Communications and Liaison, Mr. Emmanuel Obeta, recently disclosed that the Service collected revenue of N5.007 trillion in 2012. This sum exceeded the Federal Government of Nigeria's initial spending plan of N4.98 trillion in 2013. Most noticeable is the increasing performance of the non-oil taxes collection, which has grown to a new record height of N1.806 trillion, representing 36.07 per cent of the entire tax revenue up from the year 2011 volume of N1.557 trillion or 33.65 per cent performance for that year. The oil taxes revenue on the other hand contributed N3.201 trillion, representing 63.93 per cent of the entire collections. This equally is up from the year 2011 figures of N3.070 trillion. According to Mr. Obeta, these sums are significantly over the budget or target set for the agency by the Federal Government of N3.635 trillion for all its taxes. Compared with 2011, the alltaxes figure grew by N379.4 billion or 8.20%, since FIRS had collected N4.628 trillion in 2011. The contribution of non-oil taxes increased from N1.557 trillion or 33.65% in 2011 to N1.806 trillion or 36.07% in 2012. Mr. Obeta added that compared with the N715.4 billion seen in 2011, Companies Income Tax returned N847.5 billion in 2012. Value Added Tax was N710.5 billion against N659.15 billion in 2011, while Education Tax recorded N188.43 billion against the N130.74 billion in 2011. National Information Technology Development Fund accounted for N9.13 billion against the N8.67 billion it returned in 2011. The sum of N51.59 billion was realised from Personal Income Tax, PreOperational Levy, Capital Gains Tax and Stamp

Duty. Culled from, The Guardian Newspaper of Monday, January 28, 2013 at page 3. Also available at: http://www.guardiannewsngr.com/index.php?opt ion=com_content&view=article&id=111763:govt g e t s - n 5 - t r i l l i o n fromtaxes&catid=1:national&Itemid=559 (Last visited on: March 26, 2013) Oyo gets tough with Tax Evaders The Senior Special Assistant to the Oyo State Governor on Taxation, Mr. Femi Awakan recently, in a Statement made available to Journalist, read the riot act to tax evaders. According to him, the Oyo State Government will, henceforth, take stiffer measures against tax evader as the State's Board of Internal Revenue, saddled with the responsibility of revenue collection, will strictly enforce compliance with tax payment. He warned that the Board is ready to use the full weight of the law to tackle any defaulter, rich or poor, regardless of societal status. He stressed on the mandatory nature of correct and accurate payment of tax even as he highlighted the personal income tax, withholding tax and capital gains tax as principal taxes that the State's Board of Internal Revenue was set to enforce. He explained that the laws made it mandatory for all employers of labour to deduct and remit correct taxes from employees' gross income (salaries, wages and emoluments) and that in line with Section 81 sub-section 3 of the Personal Income Tax Act, failure to file the returns of employees' income tax shall attract a fine of N500,000 for corporate organisations and N50,000 for individuals. Additionally, any individual found to have obtained fake tax clearance certificate would pay N50,000, while corporate institutions found guilty of a similar offence would pay a fine of N5million. Culled from, The Punch Newspaper of Tuesday, January 29, 2013 at page 3. Also available at: http://www.punchng.com/business/businesseconomy/oyo-to-go-tough-on-tax-evaders/ (Last visited on: March 26, 2013) FIRS fights new FCT Tax Laws

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The Federal Inland Revenue Service has opposed the introduction of new tax laws in the Federal Capital Territory (“FCT”), stating that the laws impinged on its mandate to collect taxes for the territory.

the Federation as same will be in line with the spirit of the Constitution. It is recorded that he remarked that the FCT property tax Bill, when it becomes law would lead to expanding the revenue bases and creating new sources of funds.

Making submissions before the National Assembly's Joint Committee on FCT on two bills for the establishment of the Federal Capital Territory Property Tax and the Federal Capital Territory Internal Revenue Service Bill on Monday 28th January 2013, the FIRS called for the suspension of property tax in the FCT.

Culled from, The Punch Newspaper of Tuesday, January 29, 2013. Also available at: http://www.punchng.com/news/firs-opposesnew-tax-laws-in-fct/ (Last visited on: March 26, 2013)

Presenting the position of the FIRS, the Coordinating Director, Support Services Group, Mr. Osy Chuke, explained that it was their view that the Constitution does not envisage the creation of two revenue collecting agencies of the Federal Government to oversee the FCT and in the circumstance that there will be the need for several legislative amendments to accommodate an FCT Internal Revenue Service. According to him, the legislation to be amended will include FIRS Act, Taxes and Levis Approved List of Collection Act, Personal Income Tax Act, the Stamp Duties Act and Capital Gains Tax Act. Chuke further argued that the proposed FCT Internal Revenue Service would encroach on the mandate of the FIRS in many ways, as it will have the function of collection of taxes that were already being collected by the FIRS. He surmised that the existence of two agencies to administer taxes in the FCT may not be efficient, particularly in light of government's efforts to streamline agencies and reduce duplication of duties. He concluded that it was the wish of the FIRS that its current status as the collecting agency of the FCT was maintained making note of the fact that the FIRS had been responsible for tax administration in the FCT over the years. According to him, the FIRS had collected and remitted to the FCT the sum of N100.6bn between 2005 and 2011, while N30.9bn had been collected between January 2012 and January 2013.

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In what may appear to be a non-acceptance of the FIRS' position, the Speaker of the House of Representatives, Aminu Tambuwal was reported as stating that the FCT should have its own structures and systems similar to those of the other States of

Philanthropists to get Tax Incentives – Jonathan BORROWING from the initiatives in foreign countries where philanthropy is well organised, steps are being taken in Nigeria to develop a national framework for philanthropy and to ensure that donations given out are structured and expended in a strategic manner to achieve more results. Meanwhile, corporate bodies, which donated to the 2012 Flood and Rehabilitation Fund set up by President Goodluck Jonathan, are to enjoy tax incentives this year. At the first Nigeria Philanthropy Summit hosted by the Ministry of Finance and the Tony Elumelu Foundation in Abuja, Vice President Namadi Sambo, who opened the event, said Nigeria was making history by redefining the way philanthropy is done in the country. The Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, thereat, announced planned tax incentives for donors towards the Presidential Committee on Flood Relief and Rehabilitation (PCFRR) noting that the government was developing a legal frame-work for the philanthropic sector in Nigeria. She said the Forum, and the policy that is coming on soon, would help the country to build a community of donors and social investors committed to the humanitarian cause. On how the structure would work, Okonjo-Iweala stressed that the frame-work for operation was still being worked out and would be available in a month or two. She hinted that the private sector stakeholders are planning to mobilise close to 0.3% of the nation's Gross Domestic Product (GDP) into the kitty of the co-ordinating fund or office to be created for that purpose. According to her, it will

not be the typical government kind of office as it will be driven by the private sector. The summit was attended by high networth individuals (HNIs) from around the world and where discussions were had on philanthropy as a strategic tool for sustainable development. At a press briefing after the first day of the summit, Okonjo-Iweala is reported to have reiterated that the government was seriously considering a policy of tax incentives for givers and donors in the country. Culled from, The Guardian Newspaper of Monday, March 18, 2013. Also available at: http://www.ngrguardiannews.com/index.php?op tion=com_content&view=article&id=116621:govt -plans-tax-incentives-for-flood-victims-helpers&catid=1:national&Itemid=559 (Last visited on: March 26, 2013)

FIRS committed to its Transfer Pricing Policy – A.J. Bamidele A Director in the Federal Inland Revenue Service (“FIRS”), Mr. A.J Bamidele has restated the commitment of the FIRS to using its transfer pricing policy (“TP Policy”) to prevent the avoidance and evasion of corporate tax. Mr. Bamidele who made this known at an event organized by Pedabo Associates Limited, harped on the great benefit that the TP Policy portends for the development of the Nigerian economy. He expressed that the TP Policy will assist the tax authorities in their fight against tax evasion while also reducing the risk of economic double taxation. Culled from, ThisDay Newspaper of Monday, March 25, 2013 at page 30. Also available at: http://www.thisdaylive.com/articles/firs-to-fighttax-evasion-through-transfer-pricing/143109/ (Last visited on: March 26, 2013)

Know what you are paying as VAT – FIRS, Victoria Island Office The Tax Controller, Federal Inland Revenue Service (“FIRS”) Tax Office, Victoria Island, Lagos, Mr. Agu Benneth, recently at a conference held in Lagos

advised consumers to always ask for the exact amount of Value Added Tax (“VAT”) payable. According to him, the implication of paying VAT inclusive means you cannot determine what you are paying for as the law states that VAT has to be stated on the invoice. He admonished taxpayers to always insist on knowing the precise amount they are paying as tax, as this will obviate avoidable arguments with the relevant tax office at the end of the month in ascertaining the exact Input VAT to be utilized as offset against Output VAT.” He proceeded to advise on the nature of the Taxpayer Identification Number (TIN) as a unique sequential number generated electronically as part of a registration process and assigned to taxpayers such as company, enterprise or individual, for purposes of identification. He stressed that the use of TIN has become mandatory from 1st February, 2008 for all taxpayers dealing with the FIRS; while further admonishing that all banks and financial institutions are to facilitate the implementation of the mandatory use of TIN by all current account holders in accordance with the relevant Government Notice. Culled from, ThisDay Newspaper of Tuesday, March 26, 2013 at page 3. Also available at: http://www.thisdaylive.com/articles/firs-createsawareness-on-value-added-tax/143166/ (Last visited on: March 26, 2013)

VAT is the 3rd Highest Source of Tax Revenue – Kabir Mashi The Acting Executive Chairman of the Federal Inland Revenue Service (“FIRS”), Alhaji Kabir Mashi, recently disclosed at an enlightenment campaign in Lagos that Value Added Tax (“VAT”) is the third highest contributor to the nation's tax revenue in the past eight years, accounting for 16% of total collection in the period. According to him, VAT collection had witnessed a 400% increase in the period, rising from N165bn in 2003 to N659.15bn in 2011. Alhaji Mashi who was represented by the Director of Communication, Mr. Emmanuel Obeta, said there was room for improvement as the FIRS would soon come up with the draft VAT Amendment Bill. Also speaking at the event, Mr. Kingsley Okego, the

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Regional Director in charge of the Lagos Island office of the FIRS, decried the fact that VAT administration in Nigeria was yet to attain its peak even though VAT is the most important and best developed of all taxes. He added that FIRS decided to spearhead the VAT campaign in order to evaluate its performance as regards the rights and obligations of the tax payers and how the evaluation could impact on the law and its review. Okego enthused that the target of VAT is consumption of goods and services, and unless an item is specifically exempted by law, the consumer is liable to pay the tax. It is a tax on spending/consumption levied at every stage of a transaction but eventually borne by the final consumer of such goods and services. It was disclosed that the total VAT collection for 2012 was put at N710.5bn as against N659.15bn in 2011. The quarterly analysis showed that N175.9bn was raked in the first quarter of the year. This comprised N135.7bn from non-import VAT, while the Nigeria Customs Service (“NCS”) Import VAT made up the balance of N40.14bn or 3.42% of the total figure. In the second quarter, VAT receipts amounted to N179bn with the NCS import VAT accounting for N40.02bn and non-import VAT of N139bn making up the rest. The NCS import and non-import VAT recorded N170.69bn in the third quarter of 2012. The VAT collection in the fourth quarter however fell short of the target as N185.02bn was realised as against the envisaged N200.7bn. Out of the amount, NCS import VAT accounted for N44.4bn, while the non-import VAT moved up to N140.6bn. Culled from, The Punch Newspaper of Tuesday, March 26, 2013. Also available at: http://www.punchng.com/business/businesseconomy/vat-accounts-for-16-of-total-firscollection/ (Last visited on: March 26, 2013)

We are ready to Prosecute Professionals who evade Tax – Babatunde Fashola

26 Lagos State Governor, Mr. Babatunde Fashola (SAN), on Tuesday March 26, 2013 met with professional bodies and associations in Lagos State

to warn them that those defaulting in payment of taxes to the state would, after April 12, 2013, face prosecution. Representatives of professional bodies such as the Manufacturers Association of Nigeria (MAN), Nigerian Bar Association (NBA), Association of Nigerian Customs Licenced Agents (ANCLA), Nigerian Medical Association (NMA) among others were present at the Professional Stakeholders meeting held at the Civic Centre, Victoria Island, Lagos. According to the Governor, the prosecution would have commenced earlier but he had to put it on hold in order to meet with the professional bodies. He explained that the meeting was convened to provide those who are ignorant of the law, the knowledge that enables them understand their tax obligations. The Governor enthused that the professional bodies represented at the forum constituted a critical mass for the State The Governor, who gave extensive insights into what his Government had been able to achieve with the State's tax revenue warned of possible prosecution for non-compliant professionals and others after the deadline of April 12, 2013. According to him, the period of grace was to enable those willing to pay to do so. The Governor announced that his Government had already compiled a list of cases it intends to prosecute in court and he anticipated that the deadline of April 12, 2013 was a reasonable time for all to do what was required to stay on the right side of the law.

Culled from, ThisDay Newspaper of Wednesday, March 27, 2013. Also available at: http://www.thisdaylive.com/articles/fasholagives-tax-evaders-till-april-12-to-comply-or-faceprosecution/143316/ (Last visited on: March 27, 2013)

No holds Barred By: Josephine Akumbu Kandozie, ACTI

A CURSORY EXAMINATION OF THE AIMS OF SWIT 'To ensure that Tax Policies/Legislations and Tax Governance in Nigeria is made more friendly to Women'. The Question that comes to mind when we look at this aim is- Is Tax or Tax Policies meant to be gender sensitive? Women all over the world are doing pretty well in the Industries, Banking, Manufacturing, Shipping, Oil and Gas, Law, you name it, Women are excelling in their Careers they are Top Notch Achievers. Should we then say, that because a woman is heading an Organisation or is the CEO of a Company, her Company should be taxed differently from that of a Company headed by a Male Counterpart? Taxes are not gender based, Taxes are to the best of my Knowledge applied in accordance with laid down principles, rules and rates.

towards the Female Gender, I beg to differ in this regard, what is good for the Geese is good for the Gender. We cannot ask our Male counter parts to give us equal rights and opportunity in one breath and in another breath ask that they treat us with Kids Gloves. We must stand up and take charge of our destinies as successful Women Entrepreneurs in the emerging Business World, where like my learned Colleagues would say; 'there are no Women /Ladies at the Bar, only Men in Skirts' they address Her Ladyship as Her Lordship, for there are no ladies at the Bar. To ask for Kids Glove treatment in Taxes just because we are Female in my humble Opinion is saying that what the Men can do, the Women cannot do better!! But am well aware that we have all it takes as women in business, Career, Skills, Vocation, every SEGMENT OF THE ECONOMY to do all the Men can do and even better including paying taxes 'properly so charged'

On whether or not taxes should be more, friendly

OH THOU ART MIGHTY TAX ADMINISTRATOR!! This Column's intention is to reflect on the events, attitude and other issues that affect the Public by Various Tax Administrators. It is intended to use this Medium as a tool / Parameter for measuring performance of Tax administrators/ Authorities Vis a Viz treatment meted out on TAX Payers and Use of Tax Payers Monies. Isn't it funny, how they say that those who have a sit don't know how to sit down? That is an adage in

case you are wondering what this is about. Am talking about Tax Administrators and those who work under them, some of these write ups are based on personal experiences, we need to tell ourselves the truth, the essence is to help ourselves improve our services and serve our customers better, Service deliver is a key player in any Industry. Whether or not, the Industry, is backed up by the State, Local Government or at the Federal Level. The American Story has been a story of True

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democracy, where the Government does not witch hunt its Citizens just because they are bold enough to SPEAK OUT, every government policies, or behaviour that was dissatisfactory to the people was boldly criticised and the Government, quickly fell in line, because the voice of the people is the voice of Wisdom, people stood in the Sun and under the Rain just to elect some other persons to govern the affairs that affects them as a Nation. This same people should have the right to speak up when they feel that the people they stood for in the sun and under the rain to cast their votes for, are not towing the line of the promises sugar cased/coated to the people. I have heard people say you can't fight the Government and win, the question now is, who is fighting the Government, I strongly belief that the Story of America's Great Success is because it has a listening Government. A government amiable to correction, a government that has its people at heart, a government not out to amass wealth for its self and its generation unborn, but a government that depicts what true Leadership is about and that being a Leader simply means being a Servant first and foremost. A Listening Government is all it takes to make a difference in any Nation, Somebody Somewhere, had a dream, that one day Black Boys and White Boys would Sit together and the Skin of their Colour would not be the basis for judging their abilities, that racial discrimination will one day be a thing of the past, and today that dream is a Living Witness for all of us to see, that a black Man in the person of Obama will be a Leader was probably part of the dream of late Martin Lurther King Junior. He dared to dream big, he dared to stand up and SPEAK OUT, about the lacunas, he saw in governance, he dared to dream big, for according to : Mich Langelo 'The Tragedy of Life is not in dreaming Big and not Achieving it ; but rather it is Dreaming Small and Achieving It'

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A Listening Government was all it took to bring racial discrimination in America to an end a Listening Government is all we require to bring to an end all anomalies in governance and its agencies, at all levels, Federal, State, and Local Government.

Every Tax Payer deserves to be treated with respect and dignity, the taxes paid by the governed is what the Leaders use to provide the basic amenities for effective and efficient Governance. It's simply in my humble opinion a symbiotic relationship. The 'Much Citizens' of Nation who make effort to pay their taxes should not be frustrated or discouraged by heavy tax burdens and Multiple Taxation. I BEG TO REST MY CASE.

VOLUNTARY TAX PAYMENT, ACHIEVABLE OR NOT? The adage that Rome was not built in a day will be a good way to start out in writing this piece, Rome was not built in a day is a cliché, we are all familiar with. For people to pay their taxes voluntarily is a hurdle that will be crossed over a period of time. Nothing is ever really built in one (1) day, let's examine the building process, first there is the need to draw up the design of the house, which is very key to what the house will turn out to be at the end of the day. For me the issue of Voluntary Tax Payment especially for those who are not under the employment of the Federal, State and Local Governments, and well established private sector organisations (where taxes are deducted at source) will only be realisable over time and with a lot of encouragement on the part of the Tax Masters, assessors, Collectors and the likes. Massive Campaigns must be engaged in, People would really want to see the dividend of what they are paying for, but at the same time, the tax collectors, must adopt an approach that is clothed in “Chocolate”, what do I mean by this? Chocolate is most irresistible;When a tax payer walks into my office I must make sure he walks away with a chocolate offer which is always most times irresistible. When a tax Payer

walks into my Office, having given him a charge, the first thing I would do, is build up a relationship and of course many factors will come to play, I may have to adopt a symbiotic method of relationship, Give and Take, “Waiver” call it what you like, but for me, the bottom line is to get that tax payer in to the Tax Net and then we can proceed from there. It will amaze you how much the government is losing in taxes, when it becomes stiff necked over tax issues. The truth of the matter is that, it is not always easy to part with money, but it can be done with wisdom. “It is said that slowly the muddy pool becomes a river,” this is it for me, am going to gather as many tax payers as possible and will encourage them to pay their taxes, no matter how little or large it is, nurture it, such that slowly the muddy pool becomes a river, this will be so well executed that at the beginning of every year, a tax payer will willing approach the tax authorities to pay his taxes without any cohesion, especially, with regards to direct assessment. The citizens confidence in the Government of the day will need a serious boost, before citizens of our great Nation will be willing and ready to walk in to any tax office and pay voluntarily, because they have lost faith in the system, their faith needs to be boosted. The government must feel the pulse of its citizenry, and must adopt a winning strategy, my module for a winning strategy, as a tax collector my attitude to a tax payer who walks into my office, must be courteous very important, ready and willing to explain in details the requirements to the tax payer.

Follow ups thereafter, mentoring and monitoring, call my clients and find out how their businesses are faring and give a word of encouragement where needed. When citizens feel the government cares for them, they automatically return that love, if tax administrators begin to extend some courtesy even in the course of carrying out the function of collecting taxes, there will definitely be a change of attitude by the tax payers. When you give love, what you automatically receive is love and when you give a word of encouragement what you get in return is a reciprocated effort not to disappoint, whoever is encouraging you. My humble submission on getting people at all levels to voluntarily pay their taxes is to allow the muddy pool to slowly become a river. Lets collect what they have, everyone at their level, the Market women, artisans, street traders, and of course the Corporate Clientele, let's do a bit of waivers here and there, lets educate their minds, lets educate them on what is obtainable outside the shores of our country, regularly enlighten them on the benefits accruable, only time will tell, people will definitely walk in and pay. Force is not always the best way to win, strategy; like in the football pitch/field everyone in the industry, tax officers and Administrators need to restrategise, our approach, our Mannerism, all of these will go a long way towards achieving the ultimate goal; which is...? Gathering the Tax Payers in to the Tax Net.

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JAYEOBA BOWS OUT Late Emmanuel Abayomi Jayeoba

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ife is like a stage where every actor and actress plays his or her own part and leaves, This Shakespearean aphorism depicts the death of the late Registrar/ Chief Executive officer, Mr. Abayomi Jayeoba, FCTI which sad event occurred on Friday, February, 8 2013 after a brief illness. In his bid to acquire western education against all odds, the late Jayeoba attended Wesley College, Ibadan and came out with a flying colour which culminated in his admission to study both National Diploma and Higher National Diploma in Accountancy respectively from Yaba College of Technology, Lagos. He also obtained a Masters degreel in Business Administration from the University of Ife now Obafemi Awolowo University. The late Registrar/Chief Executive not only had penchant for academic pursuance but also his quest for acquisition of professional competency was never in doubt, he was a Fellow of both the Chartered Institute of Taxation of Nigeria and the Institute of Chartered of Accountants. He also, an Associate member of the Nigerian Institute of Management and the Association of Chartered Fraud Examiners.

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He worked in both the private and public sectors over twenty two years. He was at various times the Director of Administration and Finance at Lagos Chamber of Commerce and Industry (LCCI), the Chief Accountant of Omatek Computer Limited, a subsidiary of Jardine Lloyd Insurance Brokers,

United Kingdom and the Chief Finance Officer with Chase Executive Business Service Limited from where he transferred his service to Chartered Institute of Taxation. His stint as substantive Registrar/Chief Executive of the Institute witnessed huge achievement. He brought with him unprecedented managerial and administrative skills to the Secretariat of the Institute. He inculcated into his staff, a work philosophy that translated into high efficiency in their dedication to work. His final journey to the great beyond started with Night of Tribute on Wednesday 27th February, 2013 held at Plot A Hakeem Balogun Street, Alausa, Ikeja with many oratories from the President of the Institute, Asiwaju John Femi Jegede ably represented by the Deputy Vice President, Dr. (Mrs.) Somorin Teju, the President of West Africa Union of Tax Institute, Prince R. A Quadri, Barrister Chukwuemeka Eze, staff of the Institute and several others all eulogising and paying tributes to Mr. Jayeoba. A Service of Songs and lying in state took place at Methodist Church on Friday 29th February 2013 while interment took place at his Ikorodu residence. To show how the late Registrar/Chief Executive positively affected the lives of those whose path crossed his, while alive, we present below some of the tributes written in the condolence register opened on his behalf at the Institute “A gentleman par excellence, reliable, hardworking

and amiable. Rest in Peace.” - Ms Simplice Gladys Olajumoke. “I am crestfallen and downcast but God knows the best, may the Almighty father grant him eternal repose and receive his soul in paradise.” - M.A.C Dike, Vice President, CITN “This is a big blow but God knows best” - Mrs.T.E Oyekan “My beloved brother, your death is shocking but who are we to question God. Rest in Peace”. -

Pastor Mike Onipede “We miss his amiable laughter, a good man, gentle and accommodating .May his soul rest in peace”. Chief C.I Ede “He came, he saw and conquered. May his soul rest in perfect peace.” - Prince R.A Quadri, IPP CITN “Yomi, I never thought you would leave so soon, however, rest in peace.” - Femi Fajolu, former Registrar/Chief Executive May his soul rest in peace

31 Visuals from the funeral ceremonies of the late Registrar/Chief Executive, Emmanuel Abayomi Jayeoba

COUNTDOWN TO A PRESUMPTIVE TAX REGIME Barr. Chukwuemeka Eze

The informal sector of an economy is a sector where there are no adequate records of business transactions. Vast majority of commercial activities are in this sector. It is not limited to illiterate or un-trained population; it includes semi-trained, trained and educated ones. Informal business is mostly found in individual petty business, family business, import and export merchandise and even well-educated professional businesses. We are not unaware of brief case managers and managing directors. Because no adequate record is kept in this sector, it is very difficult to get 100 per cent tax compliance, but in terms of the number, it is encouraging. The informal sector has enormous revenue potential given the range of commercial activities that are undertaken in this sector. Hence, the need to bring it within the tax net as part of efforts to enhance internal revenue generation. However, getting them to pay the actual amount due without records is where the challenge is, whereas, experience has shown that in recent time, the majority of them are paying taxes even if what they are paying is inadequate. - Olanike Disu in her paper titled LIRS: Strides in Taxation of the Informal Sector, published in CITN News, Dec. 2011 edition. The challenge of enforcing the income tax laws on persons operating in the informal sector and the need to capture more taxpayers into the tax net for increased revenue to the States and Federal Government prompted the National Assembly to provide for the presumptive tax regime in the Personal Income Tax (Amendment) Act, 2011 (“PITAM”). The concept of presumptive tax in income tax management was absent in the Personal Income Tax Act, Cap. P8, Laws of the Federation of Nigeria, 2004 (PITA), which was in operation between 1993 and June 2011. Section 6 of PITAM provides:

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“Section 36 of the Principal Act is amended by inserting a new subsection “(6)” as follows – “(6) Notwithstanding any of the provisions of this Act, where for all practical purposes the income of the

taxpayer cannot be ascertained or records are not kept in such a manner as would enable proper assessment of income, then such a taxpayer shall be assessed on such terms and conditions as would be prescribed by the Minister in regulations by order of gazette under a presumptive tax regime.” The introduction of a presumptive tax regime has become imperative since one of the objectives of the Nigerian Tax System is to provide the government with stable resources for the provision of public infrastructure and services. It has been stated in the National Tax Policy that for Nigeria to pursue an active development agenda and carry out the basic functions of government, its tax system should generate sufficient resources for government to provide basic services (e.g. education, healthcare, infrastructure, security, etc.). It is a primary objective

of taxation to provide the government with the resources it shall invest in judicious expenditure that will ultimately improve the well-being of all Nigerians.

Revenue Service (LIRS) divided the informal sector into three sub-sectors for the purpose of implementation of the income tax law.

Taxpayers are the single most important group of stakeholders in the tax system. They are the bedrock of the tax system and the source of all revenue generated by tax authorities due to the significant role they play. It has, however, been discovered overtime that while some taxpayers in organized structures receive incomes with records that are easily assessable, others operate in an informal setting with little or no records. The lack of capacity on the part of tax authorities to enforce the tax laws on every taxpayer in the informal sector has enthroned a situation where many taxpayers have shunned their civic and constitutional responsibilities through tax evasion.

These are market, professionals and artisans subsectors. LIRS mobilized and sensitized these subsectors and created a flat rate of N2,500 per taxpayer in the first and third subsectors. The professionals are assessed based on best of judgment (BOJ) except where records exist.

The taxpayer is admonished in the National Tax Policy to see himself as part and parcel of the Nigerian tax system and not an outsider, and should, therefore, carry out his constitutional and civic role as his contribution to national development and growth. Already, one of the duties imposed on every Nigerian citizen by the Nigerian Constitution under section 24 (f) is that: “24. It shall be the duty of every citizen to – . . (f) declare his income honestly to appropriate and lawful agencies and pay his tax promptly.” Other than their formal compliance roles, taxpayers shall act in an informal supervisory role, as they have the right to demand for transparency and accountability in the collection, allocation, disbursement and expenditure of tax revenue. Part of the ongoing reforms in the tax system is to drag every taxpayer into the tax net for improved revenue. Tax administrators have had goose pimples trying to figure out a way of collecting taxes from taxpayers in the informal sector. THE LAGOS MODEL As a way out of this tax collection quagmire as it relates to the informal sector, Lagos State adopted associational taxation. The Lagos State Internal

JOINT TAX BOARD The Joint Tax Board was established pursuant to section 86 (1) of the Personal Income Tax Act (PITA) and it comprises chairmen of 36 State Boards of Internal Revenue and that of the Federal Inland Revenue Service. By virtue of section 86 (9) (d) PITA, the JTB shall use its best endeavours to promote uniformity both in the application of PITA and in the incidence of tax on individuals throughout Nigeria. In section 30 of PITAM, PITA was amended by inserting immediately after the existing section 106, a new section 106A – “(1) The Minister may, on the recommendation of the Joint Tax Board, make regulations generally for giving full effect to the provisions of this Act.” One of the provisions of PITAM for which JTB recommended to the Minister to make regulations is the presumptive tax regime. The JTB Secretariat in pursuance of this objective, has set machinery in motion since 2011, towards the gazette of presumptive tax regulations for direct assessment on self-employed persons in line with the presumptive tax regime principle. The FIRS and JTB have started a massive campaign to fast-track the implementation of the presumptive tax regime for the informal sector. On April 4, 2013, FIRS held a Stakeholders' Sensitisation Workshop on the presumptive tax regime in Abuja. According to FIRS, the envisaged regulations on this regime shall apply to the informal sector, including micro businesses that have an annual turnover of N6million and below. In his further comments, the FIRS Ag. Chairman, Alhaji Kabir Mashi, said: “For us in FIRS, we have decided to adopt a hybrid in developing a

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workable presumptive tax regime. This is necessary because of our peculiar situation; where we have three taxing levels…. We have a large pool of taxpayers and potential taxpayers in the informal sector in Nigeria, which can contribute a significant amount to tax collection if they are properly assisted to comply with tax laws”. It is the thinking of FIRS that a regulatory presumptive tax regime will simplify tax compliance and ensure that each taxpayer feels he is being treated fairly and equally by the tax system. FIRS observes that taxation of the informal sector, particularly persons and businesses that are not properly structured or are unable to keep proper or detailed records of their business transactions, is a topical and challenging issue not only in Nigeria but in most developing countries. The Punch newspaper of Friday, April 5, 2013 at page 31 has highlighted the FIRS position on this subject. Considering that the Chairman of FIRS is by statute the chairman of the JTB, it is discernible that the position of FIRS on this subject is the same position of JTB. In this regard, States are already waiting for the Finance Minister to sign the Regulation towards realizing the purpose of the presumptive tax regime. In the midst of the hue and cry over multiplicity of taxes in country, Nigerians will certainly cry blue murder when they discover the rate of the presumptive tax regime, which is 3% of turnover or less. Certainly, tax evasion may be curtailed but businesses may suffer as prices of goods and services will rise amidst dwindling infrastructural support for business investment and development. Only time will tell as to the likely impact of the introduction of the presumptive tax regime. ANATOMY OF THE NIGERIA PRESUMPTIVE TAX REGULATIONS, 2013

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Currently awaiting the Financial Minister's signature is the Nigeria Presumptive Tax Regulations, 2013 (“the Regulations”) which contains binding framework for the operation of the presumptive tax regime. A draft of the Regulations contains eight parts (Parts I to VIII). Part I deals with the objective, legal framework and scope. Part II provides for categories

of taxpayers to be administered under the presumptive tax regime while Part III deals with registration of the taxpayer. Part IV provides for dates of filing of tax returns while Part V prescribes for tax payment and rates. Part VI is on Administration of Presumptive Tax Regime while Part VII stipulates offences and penalties. Part VIII is the interpretation provision. The Regulations shall apply to the informal sector including micro businesses that have an annual turnover of N6million and below. The Presumptive Tax Regime shall be on a turnover basis and may be rebuttable in the sense that the tax collector is not bound to accept any figure a taxpayer claims to be his income. The tax administrator may apply his best of judgment to impose an income which he thinks, from the circumstances, a taxpayer ought reasonably to have earned. Regulation 6.2 provides that the applicable rate shall be 3 percent of turnover or N2,500 whichever is higher. The implication of this regulation is that where a taxpayer presumably earns an income of N3,000,000 in a year, he will pay an income of 3 percent of N3million, that is N90,000 (Ninety Thousand Naira). Under Regulation 5, the taxpayer shall assess himself and file his income tax return on current year or actual basis for each lapsed quarter of the year not later than the 10th of April, 10th of July, 10th of October and 10th of January respectively. A taxpayer who does not earn income shall be expected to file a NIL return for that period. The booby traps in the two preceding regulations are that the tax is based on total income earned and not on profit. A person running business at a loss is compelled to pay this tax and if he elects to pay quarterly, he must visit a tax station every three months. Considering the scope of persons and businesses covered under the presumptive tax regime, one estimates that voluntary compliance will be very low and in some cases, a taxpayer under the presumptive tax regime will pay higher tax than a taxpayer who files tax returns under a nonpresumptive tax regime. Those covered under the presumptive tax regime are: (i) Retailers of products such as food, clothing, fashion items, boutique items, perfume, precious metals, jewellery, patent medicine stores, and vulcanizers.

(ii) Small scale businesses that manufacture products that include aluminium, textiles [locally woven cloths], tie and dye, processed foods, machinery, tools, bricklaying, arts and crafts, building products, wooden products and furniture; (iii) Service providers operating businesses that include esusu/adashe/ajo and other informal monetary contributory schemes, photographers, beauty salons, barber shops, tailor shops, mechanic workshops, cobblers/shoe makers, driving schools, local tea shops, transport activities (taxi drivers, commercial motorcycle/tricycle operators), small scale restaurants, bakeries, hair dressers, and the local rental services. (iv) Tradesmen include: painters, plumbers, electricians, carpenters, masons; entertainment activities: billiard parlours, discos, cinemas, theatres and sports facilities. A taxable person under the presumptive tax regime shall within six months of the commencement of this Regulation or commencement of business, whichever is later, register with the relevant tax authority for the purpose of obtaining a Tax Identification Number (TIN). Under Regulation 8, a taxable person who fails to register will be liable to a penalty of N5,000.00 for the first month in which the failure occurs and N1,000.00 for each subsequent month in which the failure continues. A taxpayer who fails to file tax returns shall be liable to an annual penalty of N6,000.00 or part thereof. On the other hand, a taxpayer who files tax returns after the date of failure shall be liable to a penalty of N1,000.00 on the date of failure and N50.00 each subsequent day the failure to file continues. The tax due from a taxable person charged to presumptive tax shall bear interest at the Central Bank prevailing lending rate from the date when the tax becomes due until paid in full. Under this regulation, new businesses shall be granted tax breaks of two years from commencement and the relevant tax authority shall demand that the taxpayer keeps proper record and fulfils the accounting requirement under the relevant tax laws

after operating for five years from commencement of the business. A taxpayer can voluntarily elect to exit the presumptive tax regime and file the tax returns and be assessed under the regular tax system in any tax year. A taxpayer that contends an official determination made under the present regulation may make an appeal to the management of the relevant tax authority stating clearly the grounds of claim within 30 days of such contention and providing supporting documentary evidence upon which the relevant tax authority shall reach a decision within 90 days of filing the appeal. The administration of presumptive tax regime in respect of taxpayers resident in the Federal Capital Territory shall be the responsibility of Federal Inland Revenue Service, while that of the residents of the States shall be the respective State Boards of Internal Revenue responsibility. To cap it up, even those engaged in illegal businesses such as fraudsters, illegal oil bunkerers, pipeline vandals, and smugglers have been captured in the tax net of the presumptive tax regime.

- Barr. Chukwuemeka Eze is a Council member and the Chairman of Publicity & Publications Committee of CITN

IMPORTANT NOTICE TO MEMBERS Your Annual Subscription is due on 1st January, every year. It is important that you pay it as at when due so that your Institute can serve you better. Fellow

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Associates

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CITN SEEKS COLLABORATION WITH THE MEDIA THROUGH WORKSHOP The Chartered Institute of Taxation of Nigeria (CITN), in its avowed objective to enlighten the public on their rights, duties and liabilities in relation to taxation as an adjunct to its primary function of regulating and controlling tax practice and administration in Nigeria, organised a media workshop for financial co r re s p o n d e nt s / tax re p o r te rs at i t s headquarters at the 4th Floor, LCCI Building, Plot 10, Nurudeen Olowopopo Drive, Beside M.K.O. Gardens, Alausa-Ikeja on Thursday, 25th April, 2013 between 9 a. m. and 2 p.m. The eminent position of the media as the Fourth Estate of the Realm and its constitutional responsibility to hold Government accountable to the people has made it inevitable for CITN to partner with it in the effort of CITN to assist the Government to exploit taxation as a tool of good governance and fiscal sustainability. Taxation, like any other discipline or profession, has its peculiarities, technicalities and terminologies, which are incomprehensible to the uninitiated. Many reporters have fallen into error in trying to cover this beat hence the need

to organize this workshop as a means of sharpening the skills of media reporters, who are reporting or who would like to report tax matters. The Council of CITN empowered its Publicity and Publications Committee to organize this event in order to educate and interact with gentlemen of the press so as to equip them intellectually on terminologies and basic taxation issues that are germane to the performance of their functions. CITN used the opportunity to kindle the interest of media men and women in tax reporting in such a manner that the general public would develop profound interest in tax matters and their impact on governance and overall national development. This is a veritable way in which the National Tax Policy could be realized. Two resource persons, Dr. Teju Somorin and Barr. Chukwuemeka Eze, engaged the participants during the workshop, which acted as the forerunner of the Annual Tax Conference of CITN that was held at Tinapa, Calabar, Cross River State, from 7th to 11th May, 2013.

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Participants at the Workshop

Foreign News

Accountant Sentenced for Fraud, Plotting Clients' Murders Steven Martinez, 51, stole more than $11 million from tax clients

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prominent Ramona accountant has been sentenced to nearly 24 years in prison for preparing fraudulent tax returns for clients and then plotting his clients' murders in an effort to prevent them from testifying against him in court. Former IRS agent-turned-accountant Steven Martinez, 51, once lived the high life in his multi-million dollar mansion in Ramona. He became a successful accountant preparing taxes for high-end clients, but was eventually convicted of stealing more than $11 million in tax payments from those clients – and then, in a plot twist, plotting their murders. According to the FBI and federal prosecutors, Martinez stole millions from his wealthy clients over the years by preparing phony tax returns from 2004 through 2007 and then pocketing the tax money. Martinez admitted to using approximately $11 million in stolen taxpayer funds for his own personal benefit, using the cash to make home improvements, purchase a beach house in Mexico, pay for the use of a private plane and pay off his personal credit cards and loans. But the tax fraud case grew much more complicated than the initial white collar crime. Martinez was actually released, facing approximately 10 years in prison for fraud. However, while out on bail, court documents show he plotted the murder of four of his former tax clients who were set to testify against him about the theft. According to prosecutors, in February 2012, Martinez hired a hitman and meticulously planned his clients' murders by giving a would-be assassin detailed information about each of the targets. The details were contained in special “packets” that included photographs of the victims, their homes and other personal information.

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Martinez was unaware that the would-be hitman was actually a cooperating witness for the FBI, and investigators recorded exchanges between Martinez and the hired hitman. Court documents reveal Martinez told the would-be assassin he “could make him rich for the rest of his life.” He offered the man $100,000 in cash to kill a former female client in Rancho Santa Fe and a woman in La Jolla. The hired hitman told investigators that Martinez had suggested he use “two different pistols for the murders

and that he acquire a silencer.” Martinez pleaded guilty on August 10, 2012, to charges including murder-for-hire, witness tampering involving attempted murder, solicitation of a crime of violence, mail fraud, filing false tax returns, Social Security fraud, aggravated identity theft, and money laundering. On Friday, with more than 30 family members and friends watching in court, a judge sentenced Martinez to serve almost 24 years in prison and ordered him to pay more than $14 million in restitution to the victims, the IRS and the California Franchise Tax Board. U.S. Attorney Laura E. Duffy said she was pleased with the outcome of the prosecution on Friday. “This is a case of greed so extreme that what began as serious – but not violent - white-collar crimes almost escalated to the murders of four people. Fortunately FBI intervention prevented the violence and today justice was served with a decades-long sentence,” said Duffy. Martinez's attorney, David Demergian, says Martinez's crimes were fueled by a need to provide for his family. “[This] had to do with finding thousands of dollars to diagnose his autistic son, and once having made that, it became so easy for him, I think it just fed on itself,” Demergian told NBC 7 on Friday. The attorney says the fraud and murder-for-hire plot was triggered by Martinez's diagnosis of Asperger's Syndrome. “It was literally insane. There was no way he could have gotten away with it any more than he could have gotten away with a scheme to kill four people,” he added . Still, Demergian maintains that Martinez never really wanted to hurt anyone. “There's no question in my mind, he never believed anybody was going to get hurt. Of course, that's not the way it looks,” he said. As Martinez heads to serve his long prison sentence, his mansion in Ramona awaits foreclosure. Federal prosecutors say the lavish home was part of the rich lifestyle that Martinez funded through his crimes. Source: http://www.nbcsandiego.com/news/local/RamonaAccountant-Steven-Martinez-Sentenced-Tax-FraudMurder-Plots-202851191.html#ixzz2TLYo44Et

CITN Inducts 591 new members The Chartered Institute of Taxation of Nigeria has added to its fold 591 new members at an elaborate ceremony held at the Oranmiyan Hall of the Lagos Airport Hotel on Thursday, May 23, 2013. Inducting the new entrants at the occasion, the President of the Institute, Asiwaju John Femi Jegede, said that the institute, which was charged with the responsibility of determining what standards of knowledge and skills are to be attained by persons seeking to become a professional Tax Practitioner or Administrator, has churned out professionals and entered into various collaborations with other regional institutes, in an effort to ensure the best for the country in terms of tax administration. He said: “This ceremony, which is the 28th in the series, is in tune with the vision of council towards ensuring that only professionals are admitted into the taxation profession. The role of taxation and its revenue in national development cannot be overemphasized. CITN believes that an economy that is able to sustain its citizens must leverage on tax revenues, which have proved to be the most reliable source of revenue for national development and transformation.

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tax system through training and development of the workforce in various organizations and agencies. He expressed hope that the existing mutual cooperation between government at all levels and the institute, would be sustained and go a long way in improving the effectiveness of the various states' revenue agencies, while at the same time strengthen the confidence of taxpayers in the Nigerian tax system. Delivering a paper titled “Taxation as a tool for national development.” at the event, a renowned Chartered Tax Practitioner, Mr. Igho Dafinone stated that despite the alleged and assessed fiscal irresponsibility, rising recurrent expenditure and overheads that have h a l l m a r ke d t h e n a t i o n ' s j o u r n e y t o development, revenue generation is still topping the global chart of order of importance in economic growth.

“You are being inducted today to assist Government and taxpayers to plug loopholes and bring into the tax net more individuals. A situation where a negligible percentage of taxable persons actually pay taxes is very disheartening and professionals must rise up to the challenge to ensure Nigeria's economy is diversified through taxation.

For most developed economies, their major source of revenues is tax and determined by the broad base of taxable organisations, individuals and goods and services captured in their purview. But, the tax base is critically and deliberately developed to ensure returns in form of tax revenue. This brings to the consideration of these economies how favourable their business clime is; the monetary and fiscal developments, security and incentive schemes that are appropriate and at the right time; and ultimately, adequate information on the implementations of the revenues to boost confidence in tax payers. How has taxation fared in Nigeria with regards?

“The Institute is determined more than ever to collaborate with various stakeholders to enhance the manpower capacity of the Nigerian

The development aspect of the taxation seems to be a case to ponder about, given the nation's trademark for poor budget implementation.

How can development be measured? Dafinone noted that for the country to lay claim on growth and development through taxation, there must be improvement of the quality of life of the citizens, as measured by the appropriate indices in economic, social, political and environmental terms. For good taxation systems to aid development, he noted that it will be as efficient as possible to collect in terms of cost per collection, neutral as possible, so that all those in similar situations are subject to the same incidence, achieve where possible the appropriate direction of the economy or social objectives of the state setting out the legislation and be as simple as possible to co m p re h e n d and comply with. T h e Fe d e ra l Government presently harvests tax revenues from Companies Income Tax, Value Added Tax, Personal Income tax (in certain areas), Petroleum Revenue Tax, Capital Gains Tax, Industrial Training Levy, and Internet Taxes, while the state governments reap from the proceeds of Personal Income tax, property rates/land use charges, and the local government gets the market rates, television and other licenses. But tax revenue as means for national development should be evident in improving the overall conditions as measured by the indices and ensure that the improvement is dispersed as widely as possible, not concentrated in the hands of a few. Perhaps, this is the case that is worth fighting for in Nigeria, especially where those in the political class have risen from “thousanaire” or below the rank, to millionaires and billionaires, with possible chase at becoming “trillionaires”. The situation cannot be denied even as their

lifestyles and what is left of the economy are increasingly seen and felt by Nigerians. The growth and development, if any, should be sustained. It should reduce unemployment by ensuring enabling ground for the development of small businesses and revitalization of moribund companies, while taxation climate should succeed in encouraging investment, not mitigating growth of newer ones and the sustainability of existing ones. Given the indices and the objectives of government does taxation act as a tool for development? Though there are challenges with respect to the leadership and the implementation of tax revenues appropriately, there are also i n h e r e n t anomalies in tax a d m i n i s t ra t i o n and processes. According to Dafinone, the i m p o r t a n t considerations are the expected incidence and the actual incidence of taxation and the manner in which the laws and regulations are implemented. Given the content of the laws on taxation it would be an important factor in the development of the economy. Yet, there are issues with the general rules, manner of audit, inability to collect refunds where due, multiplicity of laws, information technology tax, education tax, withholding tax regulations and Value Added Tax. He suggested: “The laws are there, but we need to think and practice taxation with a spirit of fairness to all, while tax legislation needs to be written with recognition that the taxpayer is honest and not with the idea that total discretion is with the board. The appeals process, particularly with the issues on interpretation of law, needs to be conducted in a professional and not adversarial manner. Seeking the ideal rather than just winning the case needs to be the focus.

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Appointment & Recruitment Appointment Mr. Adefisayo Awogbade has been appointed the Ag. Registrar/Chief Executive of the Institute. Adefisayo, who before this appointment, was the Assistant Director of Technical, Research and Education. He is a Fellow of both the Chartered Institute of Taxation of Nigeria (CITN) and Institute of Chartered Accountants of Nigeria (ICAN). He has a B.Sc in Banking and Finance from the prestigious Olabisi Onabanjo University. Adefisayo is an astute professional who had attended several conferences and programmes within and outside the Country.

Newly Recruited Staff Oluwaseyi Emmanuel BADEJO He is an Associate member of The Chartered Institute of Taxation of Nigeria (CITN) as well as an Associate member of the Institute of Chartered Accountants of Nigeria (ICAN). He also holds an Associate Accounting Technician certificate from ICAN. Prior to joining the Institute, Oluwaseyi worked for Eko Hotels & Suites for a period of 7 years. He has a BSc in Accounting from Ogun State University (now Olabisi Onabanjo University) and an MSc in Business and Applied Economics (Finance) from the same University. He is the new Manager for Students' Affairs and Examinations. Adeyemi Ladejobi He is a Fellow member of the Institute of Professional Financial Managers (IPFM), London and an associate member of Association for Project Management, London. Prior to joining the Secretariat, Adeyemi had handled corporate responsibilities in various organisations such as Stanbic IBTC Bank Plc, Ceridian, ACCA and Scottish Legal Aid Board. He has a BA in Business Accounting from Oxford Brookes University and an MSc in Project Management from Robert Gordon University. He has over 10 years' working experience. He is the new Manager, Membership. Attah, Rosemary Ndidi Ndidi holds National Diploma and Higher National Diploma in Financial Studies and Accountancy respectively from Ondo State Polytechnic, Owo, Ondo State. Before being employed by the Chartered Institute of Taxation of Nigeria as Assistant Manager Finance, she had Accounting experience in the firm of Omni Medical Centre & Osagie Dental Clinic as an Accounts Officer from 1993 to 2003. She later worked with Marina Medical Services (HMO) Limited from 2003 to June 2013 as Account Officer, Acting Accountant and Senior Account Executive. Her skills and interest includes: Communication skill, Interpersonal Skill, Management skills, Singing and Reading. Rosemary Ndidi Attah is a student member of the Institute of Chartered Accountants of Nigeria (ICAN). Afolabi, Sikiru Olamide Olamide holds both the National Diploma and Higher National Diploma in Financial Studies and Accountancy respectively from Kwara State Polytechnic, Ilorin, Kwara State. Before being recruited by the Institute as Finance Officer, he held the post of Account Executive at the UAC Restaurant (A division of UACN Plc.) 2006 to 2010. He was also the Operation Support Officer, Guaranty Trust Bank (GT Bank) (ICSL) from 2012 till June 2013. Sikiru Olamide Afolabi whose hobby includes: football and meeting people is a Student member of the Institute of Chartered Accountants of Nigeria (ICAN). He had undergone various trainings in: tellering in a Customer Friendly environment (including fraud prevention), Customer Service Excellence Training - Exploring the Opportunities in the Accounting Profession towards Self Sustenance; and Sage Pastel Evolution End-User Basic comprehensive. Abijo, Olubunmi Mabel Mabel holds B.Sc.(Hons) Computer Science from the University of Lagos. Prior to joining the Institute as ICT officer, she held the post of Personal Administrative Assistant at Spice Communications Limited from 2006 to 2007. She was also an Industrial Attachment Staff (on FX Desk) from 2009 to 2010 with Guaranty Trust Bank (GT Bank). Olubunmi Mabel Abijo whose area of interest includes: Reasoning with intellectuals, writing on topics of interest; and hobnobbing had undergone trainings in: Enterprises Application Developer & Solutions Architect on Sun Java - NIIT Certificate ; and Diploma in Information System Management (DISM)-Aptech Computer Education. Ayeni, Opadiran Omotayo Omotayo holds both the National Diploma and Higher National Diploma in Business Administration from Kwara State Polytechnic, Ilorin, Kwara State. Before being recruited by the Chartered Institute of Taxation of Nigeria as Technical Officer, she held the post of Company Secretary/Customer Relations Officer at Kechem Limited from 2009 to 2012. She was also a teacher at United Universal Comprehensive College from January to June 2013. Her area of expertise includes: Leadership and team building, Planning and scheduling; as well as Estimating & costing. Her hobbies are: reading, travelling, and meeting people.