Tax evasion and avoidance can be described as canker-worms in revenue generation world. Despite the strict laws governing tax administration, most tax administrators find it difficult to tackle the issues of tax evasion and avoidance which had continually pose threats to revenue growth in all parts of the world.
Recently, the Minister of Finance, Mrs Kemi Adeosun and Chairman of the Joint Tax Committee, Mr Babatunde Fowler revealed their concern about the 6% tax ratio to GDP (Gross Domestic Product) being one of the lowest in the world which is presently a concern to both the Federal and State Government, and measures on how to increase the tax ratio to GDP to about 20% had been put to place.
For example, the Federal government launched Voluntary Assets and Income Declaration Scheme (VAIDS) in Nigeria for updates in tax record. The scheme was designed to harness people using the tax regime to their own advantage in order to reduce the amount of tax that is payable by means that are within the law or refusing to pay tax at all. These are mostly peculiar with all taxable individuals, firms and organizations.
As part of the efforts to reduce the menace of tax evasion and avoidance in the society, the Executive Chairman of Kwara State Internal Revenue Service (KW-IRS, Dr Muritala Awodun gave insight on why some individuals or entity in Kwara State such as Igbo Traders Association cannot be categorized as informal sector. Having been assessed with an existing tax record with the defunct board of internal revenue service, their net worth cannot be assumed to be categorized under the informal sector whose taxable income is not regularized.
As parts of the efforts to curb the menance of tax evasion and avoidance in the society, the Executive Chairman of Kwara State Internal Revenue Service (KWIRS), Dr Muritala Awodun had in various occasions explained to individuals, corporate bodies and group activities that may lead to tax evasion and avoidance, and the dangers inherent.
This was reiterated again at a meeting with the Kwara State Igbo Traders Association (KWAITA) during a courtesy visit to the Kwara State Revenue House. The Executive Chairman addressed the issue of some High Net worth individuals among the Igbo traders in Kwara State who thought they could hide under the category of the informal sector to pay a flat rate with other members of the association.
Dr Awodun said that there is no favorism in tax administration and the tax regime of Kwara State Internal Revenue Service is guided by law and tax policies.
He stressed that “taxation is based on principle of fairness. Those earning high should pay more; it will be unfair if every members of the public pays the same tax because income varies”. However, the law allows anyone that doesn’t agree with the assessment raised to write a letter of objection which may or may not be considered based on available information.