Strategies to tackle tax evasion in Nigeria revealed

In recent news, Nigeria's Federal Inland Revenue Service has made significant strides in tackling tax evasion, generating over 2 trillion naira in the first half of this year, accounting for 75 percent of its annual target. The agency has been working to address the issue of tax evasion in the country, with Theophilus Emuwa, Managing Partner at Aelex, shedding light on the strategies that should be adopted to effectively combat this challenge. Emuwa emphasized the importance of enforcing existing tax laws before considering amendments. He highlighted that while there have been discussions about amending outdated and complex tax laws, the focus should be on implementing the current laws more effectively to ensure compliance. He stated that the lack of enforcement leads to loopholes in the system, allowing for tax evasion to persist. Emuwa suggested that a more proactive approach to tax collection is needed to improve compliance and increase revenue. The conversation also touched upon the success of the Federal Inland Revenue Service in ramping up tax collection, reaching 75% of its target for the year. Emuwa commended the agency for its progress but noted that there is still room for improvement as Nigeria's tax-to-GDP ratio remains below 10%, falling short of the 15-20% range seen in other African countries. He urged the government to focus on expanding the tax bracket and increasing compliance to boost revenue. While discussing the need for regulatory reforms, Emuwa emphasized the importance of effective implementation. He stressed that simply improving regulations is not enough if they are not enforced rigorously. Drawing parallels with Lagos State's successful tax collection efforts, he suggested that the federal government could learn from the state's strategies and apply similar methods to enhance tax compliance. Overall, the key takeaway from the interview is the critical need for proactive tax collection measures to address tax evasion in Nigeria. Emuwa's insights underscore the importance of enforcement and compliance in maximizing revenue potential and closing existing loopholes in the tax system. As Nigeria aims to increase its tax-to-GDP ratio and improve revenue generation, a concerted effort to implement existing laws and expand the tax base will be essential in achieving sustainable progress in combating tax evasion.