According to the Chartered Institute of Taxation of Nigeria, a comprehensive examination of the nation’s international tax laws is necessary to create a framework that will boost tax collections.
The 25th annual tax conference of the institution, with the theme “Nigeria of the future: Achieving sustainable development through taxation,” was held in Abuja.
During a panel discussion at the conference titled “Global Trend in Taxation of Digital Economy: Assessing Economic, Legal and Tax Policy Implication,” prominent financial figures presented on the subject.
A comprehensive review of our international tax policies, including multilateral and bilateral agreements, is required in order to have a strong legislative framework that will increase tax revenue in Nigeria, the CITN noted. “Urgent attention to countermeasures of tax avoidance by multinational enterprises has become important,” it said.
It claimed that the recent development of the digital economy has given tax authorities the chance to construct legislative frameworks for taxing a variety of enterprises and transactions.
The report stated that the digital economy had produced new growth and employment opportunities and that as a result, there were more gig workers offering labor services through platforms under one-off contracts.
However, despite a major gain in understanding of taxation digital enterprises, the CITN claimed that current laws and institutional mechanisms, particularly the tax and social security systems, were not effectively adapted to this new situation.
As a result, it said, there had been issues with tax gaps, which included tax revenue shortfalls caused by under- or non-reporting of taxable income, an unfair tax burden between self-employed and salaried workers, and inconvenience issues with tax declaration.
It stated that the disruption led to base erosion and profit shifting because business activities and consumer location were frequently separated from associated earnings and reported in various jurisdictions.
The OECD created the BEPS Action Plan, which contained measures intended to address the tax problems of digitalization, to address this issue, it was highlighted.
A presentation on “Global progress toward public, country-by-country reporting by MNEs” was given by Ian Gary, Executive Director of the Financial Accountability and Corporate Transparency Coalition, a nonpartisan coalition of more than 100 state, national, and international organizations centered in the US.
