Nigerian businesses need to brace up for the new tax regime – Yomi Olugbenro, head, tax, Deloitte
Considering the outlook for the upcoming year, top Deloitte tax analyst has advised Nigerian businesses to brace up for a new tax regime. The case for utmost preparedness is not unconnected to the increase in Value Added Tax (VAT) from 5% to 7.5%, and various other statutory policies expected to be deployed as balancing instruments to shore up the economy.
Speaking at the Nigerian Stock Exchange (NSE) CEO interactive session recently, the head of tax, west Africa, Deloitte Professional Services, Yomi Olugbenro, admonished Nigerian business owners to evaluate the impact of the new tax structure and put in place plans that will ensure stakeholders’ (especially clients’) value is not jeopardised by the new regime.
Olugbenro explained that in the first place, it is surprising that Nigeria has not placed so much emphasis on tax before now. He said that the total tax received within a nation is a reflection of its wealth. Presently standing at 7% of GDP, the experthighlighted that the current contribution of tax to the economy is unsustainable.
He noted the the average tax to GDP contribution among other top African countries is 17%, while globally it stands at 35%. Therefore, he encouraged policy makers to create structures that will make it less complicated for businesses to pay tax. In his opinion, this will encourage more people and businesses to carry out the statutory obligations.
Meanwhile, on a general note, the government has said from 2020, citizens will have to show evidence of tax compliance to operate bank accounts in any part of the country.