Mark Abuh
described the use of tax consultants as an ‘aberration’.
A tax expert, Mark Abuh, on Friday, said that
the use of consultants by different tiers of the Nigerian government to collect
taxes and levies was illegal.
The federal government, several states, and
local governments engage consultants for tax collection.
Mr. Abuh, who is the Tax Adviser to Growth and Empowerment in States (GEM3),
a Department for International Development (DFID) sponsored programme, made the
disclosure in an interview with the News Agency of Nigeria in Abuja.
He said that the use of consultants in tax
collection had become a trend, but described it as an “aberration”, which was
being done at the detriment of appropriate government officials.
He added that “Decree 21 of 1998 prohibits the
use of consultants for assessing and collecting taxes and levies by any tier of
government.’’
Mr. Abuh also said that the use of consultants
by some state and local governments was one of the factors that led to multiple
taxation of citizens and organisations.
“Section 1(1) states that notwithstanding
anything contained in the Constitution of the Federal Republic of Nigeria 1979,
as amended, or in any other enactment or law, no person, other than the
appropriate tax authority, shall assess or collect tax or levy.
He stressed that “nobody, other than appropriate
government agency and officials, shall on behalf of government, collect tax or
levy as listed in the Schedule to this decree.
“Sub-section 2 states that no person, including
a tax authority, shall mount a road block in any part of the federation for the
purpose of collecting any tax or levy.’’
The tax expert pointed out that the Tax Act
provides that the Board of Internal Revenue in a state could delegate some of
its non-core functions to tax consultants “but not for the assessment and
actual collection.
“The core functions of assessment, collection
and enforcement of tax are functions you cannot delegate to consultants but
many state governments have gone outside the law to do so.
“Revenue consultants are multi-disciplinary
professionals with expertise and resources in revenue generation, financial,
taxation, management and advisory services.’’
Abuh said that consultants had often used means
other than what the law prescribed to collect taxes and levies in local
government areas.
He observed that many state governments spent
between 10 per cent and 50 per cent of their revenue on consultants and failed
to improve the capacity of their revenue staff.
“Currently, the Personal Income Tax (Amendment)
Act specifies that every Board of Internal Revenue is entitled to about five
per cent of all collections to run its own activities but the states prefer to
spend more on consultants,’’ he added.
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