The Presidential Committee on Fiscal Policy and Tax Reforms has proposed a tax collection strategy that will ensure that taxes collected from artisans, petty traders, transporters and other operators in the informal sector get to government coffers.
The strategy, according to the Chairman of the committee, Taiwo Oyedele, is adoption of Unstructured Supplementary Service Data (USSD) and other digital channels for the payment of taxes and levies across the three tiers of government in Nigeria.
Oyedele disclosed this on Wednesday while sharing updates on the Committee’s activities.
He disclosed that part of the proposals to the government is to cancel many of the current taxes that have become burdensome to the people, harmonize the few that are justifiable, and digitize the collection process with multiple channels including USSD to drive efficiency, reduce leakages and promote accountability.
The USSD is a GSM protocol that is used to send text messages. Currently being deployed by banks for financial services, USSD allows users to interact directly from their mobile phones by making selections from various menus.
While noting that there are currently over 60 taxes, levies,and charges across the 3 levels of government, Oyedele said states and local governments are administering 46 of these, including road taxes, motor park levies, truck, canoe, wheelbarrow and cart fees, etc.
He added that there are even more unauthorised taxes all disproportionately affecting small businesses including petty traders, hawkers, artisans, truckers, cart pushers, okada riders and other transporters.
He said, “The associated costs are inevitably passed on to consumers, mostly low-income earners. The payers also have to contend with the unorthodox means of collection and harassment from untrained revenue collectors on highways, markets, streets, etc while there is very little to show for the revenues collected.
“We propose to repeal many of these burdensome taxes, harmonize the few that are justifiable, and digitize the collection process with multiple channels including USSD to drive efficiency, reduce leakages, and promote accountability.”
He observed that the reforms being proposed also have a social dimension. Oyedele said the committee has two choices recommending that new personnel be recruited and trained to drive compliance or train the existing collectors to be civil in their approach.
“While the former may lead to potential backlash, the latter offers a more sustainable solution, avoiding social crises and providing relief to small businesses. Our reforms stand a better chance of success when we find a win-win outcome for all stakeholders than those which seek to alienate others,” he said.
