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FIRS Calls For Increased Collaboration Within African Countries To Effectively Tax Digital Businesses ~ Prestige News
The Federal Inland Revenue Service (FIRS) has stated that there is need for improved collaboration among countries and international stakeholders with the aim of exploring alternative rules that will enable market jurisdictions, particularly African countries, to effectively subject digital businesses to tax.
This was stated during a presentation by the Executive Chairman of the FIRS, Muhammad Nami last week, Friday at a Technical Assistance Programme organized by African Tax Administrators’ Forum’s (ATAF) with the theme “Member’s Needs and How To Broaden the Collaboration,” held in Lomé, Togo.
Mr. Muhammad Nami in his presentation noted that although some African countries had endorsed the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework’s global solution on the tax challenges of the digitalized economy, Nigeria continues to maintain its position that the outcome will not be favourable to African countries.
According to him, “Nigeria continues to hold the view that the outcome will produce very minimal revenue comfort for African counties. This is instructive considering the implementation challenges that developing jurisdictions will face due to the complexity of the Pilar 1 and 2 rules.
“Our analysis continues to show that the possible cost of administering and implementing the complex rules will far outweigh the expected revenue accruing from its implementation.
“I therefore urge the African Tax Administrators Forum to join the discussion at the UN Tax Committee of Experts, South Centre, as well as collaborate with all other well-meaning stakeholders to explore alternative rules that will enable African countries to effectively subject the digital businesses and base eroding payments to tax in our jurisdictions.
“These collaborations should extend to other rules developed and implemented at the international level for the taxation of Multinational Enterprises, such as the tax treaty, exchange of information and transfer pricing rules.” Muhammad Nami stated.
He further called for the African Tax Administrators Forum to collaborate with the United Nations Development Programme (UNDP) to explore opportunities for Africa within the programme’s Tax for Sustainable Development Goals Initiative, to ensure that African countries are able to generate appreciable revenue to fund the Sustainable Development Goals.
While discussing the needs of the West African region that require Technical Assistance of ATAF, the Executive Chairman FIRS noted that there was need for capacity building of members in respect of Base Erosion and Profit Shifting Actions by Multinational Corporations, as well as on the taxation of the digital economy.
“It is crucial for the ATAF Technical Assistance to look towards improving the capacity of member country’s tax administration, through the digitisation of operations. Also, critically needed by tax authorities in the West African region is the development of Data Analytics intelligence expertise and the use of research tools that are required for taxation in a modern economy,” he highlighted.
Mr. Nami further urged the African Tax Administrators Forum to organise peer-to-peer knowledge sharing sessions between beneficiaries of the Technical Assistance programmes, while also intensifying on its technical assistance on international tax rules, particularly in the areas of tax treaties, transfer pricing, and exchange of information.
The African Tax Administrators Forum Technical Assistance (ATAF-TA) Programme aims at helping members build sustainable and efficient tax systems while achieving its strategic plans to increase domestic resource mobilisation, target the development of African expertise and support Africa’s effective voice in the international tax environment.
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