An interactive table that shows the ‘ease of paying taxes’
ranking and the three sub-indicators results for 189 economies, clearly reveals
Nigeria as third most laggard country when it come to the time it takes tax
payers to comply.
Tagged ‘the changing face of tax compliance in 189 economies
worldwide’ Paying Taxes 2015 measures the ease of paying taxes across these
economies by assessing the time required for a case study company to: prepare,
file and pay its taxes, the number of taxes that it has to pay, the method of
that payment and the total tax liability as a percentage of its commercial
profits.
Interestingly, it takes the Nigerian taxpayer an average of 908
hours to comply, followed by Bolivia about 1,025 hours, and the worst being
Brazil- about 2,600 hours. Out of the 189 economies, Nigeria –Africa’s largest
economy by GDP size, ranks low at 179 with total tax rate at 32.7 percent.
Nigeria ranks below other major Africa countries. For instance,
South Africa ranks 19 with 28.8 percent total tax rate, and compliance hours of
200. Ghana ranks 101, with 33.3 percent in total tax rate, and 224 hours
compliance time. Kenya ranks 102 with 202 hours in compliance time. The
country’s total tax rate is 38 percent. Angola ranks 144 with 282 compliance
hours and 52percent in total tax rate.
These indicators evidently signal challenges ahead for the
Babatunde Fowler-led Federal Inland Revenue Service (FIRS) in meeting the
federal government mandate of shoring-up tax revenue and improving on the
country’s tax administration.
The new change of leadership at FIRS is predicated on the
resolve of President Muhammadu Buhari to ensure maximum increase in tax revenue
as the era of absolute dependency on oil proceeds seems over, with over 60
percent decline in oil price.
Nigeria’s total tax revenue collection (oil and non-oil) for
second quarter to June 2015 was N1.188trillion as against 2014 government
quarterly target of N1.021trillion.
At N306.141billion, Petroleum Profit Tax (PPT) contributed 25.77
percent of to the total collection; while at N881.98billion, non-oil taxes
accounted for 74.23percent of the total tax revenue collection as at half year
to June 30.
‘Paying Taxes’ records the taxes and mandatory contributions
that a medium-size company must pay in a given year, as well as measuring the
administrative burden of paying taxes and contributions.
Taxes and contributions measured include corporate income and
other profit taxes, social contributions and labour taxes paid by the employer,
property taxes, property transfer taxes, dividend tax, capital gains tax,
financial transactions tax, waste collection taxes, vehicle and road taxes, and
any other small taxes or fees.
On the positives, the United Arab Emirates (UAE) ranks best with
total tax rate of 14.8 percent, while in that country it takes just 12 hours
for tax payers to comply; Qatar is almost at par with UAE in terms of ease of
paying tax ranking, but its tax rate is 11.3 percent and it takes tax payers in
that country 41 hours to comply.
These indicators illustrate both successful tax reforms and
reform challenges, as well as provide a platform for government and business to
engage in constructive discussion around tax reform across a broader range of
issues.
BusinessDay
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