CEM REPORT, ECONOMY| The Chartered Institute of Taxation of Nigeria (CITN) has made a strong call to action, urging all levels of government – federal, state, and local – to take decisive steps and eliminate the unauthorized collection of taxes by non-state actors across the country.
This critical issue was raised by CITN President and Chairman of Council, Samuel Agbeluyi, during the inauguration of the institute’s Abuja Liaison Office in the Federal Capital Territory.
He emphasized that this demand was a key recommendation formulated during a recent week-long CITN conference.
“We had extensive discussions on the collection of taxes by non-state actors at our conference.
“Our recommendations will not be limited to the Federal Ministry of Finance. We are also sending a formal communiqué to the National Security Adviser.”
CITN Multi-Pronged Approach
Agbeluyi highlighted the multifaceted nature of this problem, acknowledging that it goes beyond purely financial concerns.
“The activities of these non-state actors have security implications that the Ministry of Finance and the Federal Inland Revenue Service (FIRS) might not be fully equipped to handle,” he explained.
“Therefore, our plan is to send our recommendations to various stakeholders, including security agencies, to ensure comprehensive implementation.”
Expressing optimism about the government’s receptiveness to such recommendations, Agbeluyi pointed to past collaborations.
“We have a history of the government listening to constructive advice, both at the national and sub-national levels. We are confident that they will take our concerns seriously this time as well.”
CITN Recommendation on Illegitimate Tax Collection
When directly questioned about the nature of the CITN’s recommendation, Agbeluyi offered a clear and unequivocal response.
“There really is no other option – we need to stop them completely,” he declared.
“The government has a responsibility to put a definitive end to this. That’s why I emphasized the role of the National Security Adviser. Allowing non-state actors to collect taxes is simply unsustainable. It’s not a civilized practice, and there’s absolutely no accountability involved.”
Agbeluyi elaborated on the detrimental impact of this unauthorized tax collection on Nigeria’s economic well-being.
“One of the reasons why Nigeria’s tax-to-GDP ratio remains low is because the money collected by these non-state actors never reaches the national treasury.”
“This skews our economic data and hinders accurate financial planning. It has to stop.”
Non-State Actors
Agbeluyi further clarified who these non-state actors are. “We’re talking about area boys, warlords, and anyone else who isn’t authorized by law or the constitution to collect taxes,” he explained. “These individuals are constantly harassing business owners and extorting money under the guise of taxation.”
The CITN President pinpointed the local government level as a particularly vulnerable area.
“In some cases, local government leaders hire these very people who might have supported them during their campaigns.”
“This practice needs to end immediately if we want to create a truly civilized and transparent economic environment.”
Agbeluyi concluded by urging all levels of government to work together to eradicate this illegal activity. He emphasized the negative impact it has on legitimate businesses and hinders economic growth.
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If You Ask Me
Agbeluyi’s call highlights the critical need for a standardized and transparent tax collection system in Nigeria. The presence of non-state actors creates a chaotic environment, discourages investment, and undermines government efforts to improve tax collection efficiency.
CITN’s recommendation presents an opportunity for the government to demonstrate its commitment to a reformed and robust tax system. By working collaboratively with relevant stakeholders, including security agencies and professional bodies, the government can create a system that fosters economic growth and ensures all tax revenue contributes to the national coffers.
The success of this initiative hinges on a multi-pronged approach. Strengthening law enforcement to deter illegal tax collection, educating citizens about authorized tax collection channels, and promoting transparency in tax administration are crucial steps. Additionally, fostering a culture of tax compliance requires ongoing public education and awareness campaigns.
Eradicating non-state actor involvement in tax collection is a necessary step towards a more efficient and equitable tax system in Nigeria. By implementing CITN’s recommendations and taking decisive action, the government can unlock the true potential of the country’s tax base and ensure a more sustainable path to economic development.
