As published on thenationonlineng.net, Wednesday 30 November, 2022.
The Chartered Institute of Bankers of Nigeria (CITN) has said that tax administrators have not agreed on the acceptable way to tax rising digital economy.
Speaking at the 47th induction ceremony for new members in Lagos, CITN President/Chairman of Council, Adesina Adedayo, said that taxation in the 21st Century fourth Industrial Revolution era has transformed significantly. The use of Big data, Internet of Things (IoT) and Data Analytics among other digital complexities has become the new world order.
He said the digital economy has grown dramatically worldwide, leading to the growth in e-commerce and online transactions. Despite the advantages linked to the expansion of the digital economy, several challenges have also originated. In the midst of this challenges, tax implications of the digitalised economy are perhaps the most urgent that bedevils revenue authorities, policymakers of governments, international organisations and tax professionals.
“Tax administration in Africa and indeed Nigeria remain unclear on the most effective and efficient way to tax the digital economy, yet the challenges arising from technological advancement and intricate business models continue to mount; thus, increasing the likelihood of tax revenue leakages,” he said.
He explained that several international and regional effort have been made in recent times to address these issues.
“Some of which include the United Nations Guidelines on Transfer Pricing, efforts to regulate Base Erosion and Profit Shifting through the BEPS projects, The Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines and The African Tax Administration Forum (ATAF) guidelines on intangibles among other unilateral and bilateral efforts,” he said.
Also, in relation to the OECD Two Pillar Solution, ATAF, on behalf of African countries, has posed questions on the effectiveness and inclusiveness of the proposed provisions and pillars guiding the envisaged global taxing rules.
Similarly, the CITN recently engaged key stakeholders in a round table discussion to appraise the viability and adoptability or not of the OCED Two Pillar Solution. While there still exists opinions on which strategy will prove most effective for a high consumption-mono economy like Nigeria, I believe that an in-depth impact assessment of the Tax Deal would put our decision as a nation in proper perspective.
“It therefore behoves on us as tax professionals who are the “Hope of the Nation” to constantly engage and contribute meaningfully to the Country Impact Assessment of the OECD Tax Deal in Nigeria. To do this effectively, I implore you to constantly up-skill your knowledge on global trends in taxation. The Institute, including the CITN Tax Academy organises various trainings, conferences, workshops, seminars and specialised training programs to enable our members update themselves on new developments in the tax system,” he said.
Adedayo advised the new inductees not fall into the trap of complacency. The Institute expects you to hold in high esteem her core values which have been redefined as: Service, Teamwork, Excellence and Professionalism (S.T.E.P). I beckon you therefore, to strictly adhere to these guidelines and principles in the course of your professional engagements.
The CITN President also warned the newly inductees to ensure professionalism, ethical practices and stand by the values, vision and mission of the institute while they do their jobs in their respective calling.