By Stella Obi
Experts at the National Tax Conference have posited that with an appropriate tax model and education, businesses in the informal sector have been charged to imbibe the culture of paying tax for economic growths of small firms.
Espousing this in Lagos during
the 6th Blakey's National Tax Conference held last Thursday with the theme,
"Transforming the Informal Economy Through Taxation: Opportunities and
Challenges", the experts noted that taxing the informal sector will help
build morale and culture of tax compliance.
In his lecture entitled,
"Transforming and Growing the Informal Sectors of MSMES through
Appropriate Tax Regime", Engr Anthony Chinwe informed that MSMES play
important roles in the development of the Nigerian economy.
According to him these
businesses account for nearly 90 percent of the jobs in the country and
contribute over 45 percent to the countrys GDP, with 98.8 percent in the micro
cadre.
However, Chinwe noted that most
of these business entities are not registered or captured by the regulatory authorities.
Engr Chinwe gave some of the
challenges facing this sector as lack of access to suitable finance, multiple
taxes and levies, insecurity, limited access to justice, stifling business
climate due to inappropriate government policies, legal and regulatory frameworks
and poor record keeping.
To make the informal sector tax compliant, Chinwe advocated the following: education and awareness, incentive and benefits, reviewing the constitution and tax laws, support infrastructure development, social dialogue and single tax authority.
Presenting his lecture entitled
"Taxation in The Informal Economy," Founder and Managing Partner of
Modilim & Co, Dr Patrick Modilim gave strategies for encouraging tax
compliance in the informal sector as strengthening firms incentives, capacity
and collective action and strengthening political and administrative
commitment.
Dr Modilim was of the opinion
that the slow progress in taxing the informal sector was due to the challenges
of locating and taxing large numbers of small firms eager to evade the tax net
and lack of commitment of political leaders and tax administrators with little
incentive to focus resources on taxing the informal economy.
Dr Modilim stressed the need
for revenue authorities to encourage the development of informal economy
associations , negotiations, taxpayer
education programmes and dialogue between the State and informal economy firms.
In his keynote paper
entitled "The Future of Taxation-
the Game Changer: Transforming the Informal Sector through Taxation", the convener of the event, Chief Blakey
Okwudili Ijezie, Founder & Managing Partner, Okwudili Ijezie & Co.
(Chartered Accountants), said that transforming the informal sector through
taxation was a complex task but with Artificial Intelligence, it would be more
efficient, effective and equitable.
Chief Ijezie maintained that
Artificial Intelligence was a veritable tool for integrating the informal sector
into the formal economy.
He informed that the future of taxation was not about compliance but collaboration adding that Artificial Intelligence would facilitate an era of cooperation between tax authorities, taxpayers and technology providers.
In his opening remarks,
Chairman of the occasion, Former Executive Director of Federal Inland Revenue
Services, Chief Mark Dike, underscored the importance of taxation saying it
helps the government to provide meaningful and gainful employment to the
teeming population as well as promote economic growth and development.
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