Tax experts have pointed out that the success of the Federal Government’s efforts to stabilize the economy relies on a few crucial elements: clear laws, steady enforcement of regulations, and active cooperation among all parties involved. These insights were shared during the recent virtual forum on the Economic Stabilisation Bill, organized by the Chartered Institute of Taxation of Nigeria (CITN). This platform allowed professionals to discuss how proper tax reforms can play a pivotal role in generating government revenue while ensuring a welcoming atmosphere for investors.
The proposed tax reforms, if implemented effectively, are expected to enhance Nigeria’s financial stability and revenue collection. These reforms are thoughtfully designed to align with existing tax laws, such as the Petroleum Industry Act and the Petroleum Profits Tax Act. By creating consistency between these frameworks, the aim is to strike a balance where the government can generate income while still providing incentives for investors in the oil sector. This balance is essential for both the country’s financial health and attracting foreign investment.
During the forum, Alatoye Azeez, the Managing Partner at Ascension Consultancy Services, offered some valuable advice to upstream oil companies. He emphasized the importance of complying with tax regulations while strategically optimizing deductions to minimize tax liabilities. Azeez highlighted that keeping accurate financial records is critical for businesses and encouraged them to seek expert advice when planning their taxes. This approach can help companies avoid unexpected financial burdens that might arise due to poor tax management.
Azeez, who also holds the position of Dean of the Extractive Industries Taxation Faculty at CITN, delved into the details of petroleum taxation and discussed how the 2024 Economic Stabilisation Bill proposes to restructure tax regimes for upstream oil operations. He emphasized that a key part of this bill is aligning tax policies with the Petroleum Industry Act, which was introduced in 2021. Moreover, he underscored the significance of tax audits to promote transparency and accountability within the oil and gas sector. Azeez encouraged participants to deepen their understanding of the laws and regulations surrounding petroleum taxation to enhance compliance.
Read Also: Solar Energy Is Less Expensive Than Band A Tariff — Royal Power CEO, Odugbesan
Emmanuel Okon, the Assistant Director of the Oil and Gas Department at the Federal Inland Revenue Service, also shared insights during the discussion. He warned against the temptation of aggressive tax planning that could lead to tax evasion, stressing that the line between the two can sometimes be unclear. Okon pointed out the necessity of strict oversight to prevent tax avoidance schemes that diminish government revenue. His caution serves as a reminder that while companies look for ways to save on taxes, they must do so within the boundaries of the law.
In a panel discussion, industry leaders, including Olumide Esan from Deloitte and Oluremi Olubamowo from Shoreline Natural Limited, reinforced the need for ongoing education regarding the changing tax environment. They urged industry operators to actively participate in compliance efforts, which would lead to a more transparent and efficient tax system. Their dialogue emphasized the importance of understanding new regulations and the implications they have for tax planning and operations in the oil and gas sector.
CITN President Samuel Agbeluyi also spoke during the event, reiterating the institute’s dedication to professional development. He announced plans for specialized training sessions set to begin in March. The goal of these sessions is to help tax professionals grasp the intricacies of tax processes, making it easier for them to navigate complex regulations. Agbeluyi’s commitment to education underlines the necessity of having well-informed professionals in a rapidly evolving tax landscape.
Overall, the forum served as an essential gathering for tax professionals, government officials, and industry stakeholders to discuss strategies that could bolster Nigeria’s economic stability. The experts recognized that consistent enforcement of regulations and collaboration among all parties are vital for sustaining economic reforms and fostering investor confidence. By working together and maintaining transparency in tax matters, Nigeria can move towards a more stable and prosperous economic future.
