Minister of Finance and the coordinating minister of the economy, Dr. Ngoni Okonjo-Iweala has said that the decision to engage the services of McKinsey & Company to provide technical assistance in the implementation of the Capacity Enhancement Programme, CEP, was not an indication of lack of trust and faith in the abilities of local consultants and tax administrators.
Dr. Okonjo-Iweala spoke on Thursday in Lagos at the Stakeholders Engagement Forum organized by the Federal Inland Revenue Service, Firs at the Eko Hotels, Victoria Island, Lagos.
The minister said that the choice of McKinsey over and above local consulting firm was because the firm offered a more competitive package that is strictly performance based, rather than a high percentage being requested by local firms.
“Let me assure you that we did not just chose McKinsey just because they are a foreign company. No, we picked them because they are offering us something much more mutually beneficial.
“What happen is that most of the local firms that submitted their bids wanted between 40-50 percentages but here is a firm that is willing to go as low as even four per cent. If any of you were in our position, which of the offers would you have settled for?”
The minister said that the engagement forum being organized by the FIRS, was intended to fully engage the tax payers, especially the corporate organization, particularly now that the country’s Gross Domestic Product, GDP, has been rebated so that everyone will understand why the country’s tax system has to be aligned with the new GDP rating.
The minister said that efforts are ongoing to re-evaluate the country’s tax regime, stressing that “we can afford a situation where the small people and organisations pay tax while big firms don’t.
Earlier, the Acting Executive Chairman of FIRS, Kabir Mashi said that the stake holders engagement forum, the first in the series of stakeholders interface planned for the year, was borne out of the Capacity Enhancement Programme, CEP, project of the agency designed to enhance the technical and human resources capabilities of the FIRS towards improving its non-oil revenue collection.
He said that the agency had undergone significant reforms leading to the improvement in overall tax administration, including areas such as improved tax collection, introduction and implementation of a National Tax Policy, amendment and enactment of tax laws, improved staff welfare and working conditions, automation of tax processes and increased utilisation of technology.
Mashi said that it was in fulfillment of its mandate and as part of the overall strategy of government to enhance operational efficiency that McKinsey & Company was engaged to provide technical assistance in the implementation of its Capacity Enhancement Programme, CEP.
The CEP, he said, is a specific intervention to give further uplift to FIRS in its quest to become an organisation that can effectively and proactively support the aspirations of government to make Nigerian economy one of the largest in the world.
One major area of focus, he said, is the implementation of its non-oil tax collection and other indices of measurement, where improvement is necessary, such as tax-to- GDP ratio and the raio of oil to non-oil tax collection.
He said that with the intervention of CEP, FIRS has embarked on some key initiatives especially in the areas of audits, arrears and debt enforcement, tax exemptions, evasion (high net worth transactions and rentals), registration, filing and improved communication as a means of enhancing compliance.
The FIRS boss said that part of the purposes of the forum was to reassure the taxpayers that it appreciates their efforts in contributing to the national development through the payment o taxes, even as he solicited for more cooperation and support of the stakeholders.
He assured that the agency is constantly seeking to improve on its performances, adding that as “We implement these initiatives, we shall interact with you more closely and hope that you see yourselves as partners in national development.”
President, Dangote Group, Aliko Dangote urged the government to device a means of appreciating tax-compliant companies and individuals while at the same time, openly rebuke those that are in the habit of defaulting in the tax system, this, he believe will further help to encourage and entrench the culture of voluntary tax compliance in the country.
Dangote regretted that even with the sectors where his group operate, there are a whole lot of firms that don’t pay taxes even when they constantly declare huge profits, stressing that what those companies declare as profits are actually the taxes they have refused to pay.
HGe said that it would be unjust for other corporate organisations to keep faith with their tax system while a whole lot of others are perpetually in the habit of evading tax, noting that though tax payment could sometimes be painful, it is still very necessary to assist the government through propmt and accurate tax payment.
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