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00:00Data from the National Bureau of Statistics shows the country raked in 1.78 trillion naira as value added tax for the third quarter of this year,
00:08showing a growth rate of 14.16% on a quarter-on-quarter basis.
00:13Meanwhile, the company income tax volume for the period under review fell 28% on a quarter-on-quarter basis to 1.77 trillion naira.
00:21Oladejo Adeyemi, Associate Director, Commercial Practice at Andersen Hydro, joins me now for more on these and updates on the tax reform bills.
00:29Oladejo, thanks a lot for joining us on the show today. Now, let's walk through your reading of the numbers we are seeing here,
00:35the different narratives and the sort of picture it's painting right now.
00:39We are seeing a sustained vast collection trajectory at this point in time.
00:43However, we are seeing a fall in the company income tax. Walk us through your assessment of the numbers here.
00:50All right, David. Good afternoon and thanks for having me.
00:54I think, like you said, I mean, the numbers ruled out by the MBS, they show positive quarter-on-quarter increments,
01:04you know, based on revenue collection with particular emphasis on VAT.
01:12And I mean, this is only suggestive of, you know, many of the efforts of the government to ensure that there's increased collections
01:22and also the fact that there's been this increased focus.
01:26I mean, you did mention the tax reform bill, you know, which I know is a conversation we will come to.
01:32But over the period during the year, there's been this increased focus on taxation, you know, and tax-related matters by this government.
01:41And without a doubt, the activities also going on within the digital space,
01:49as you will see from the sectoral contributions, you will see that the ICT sector has indeed been a major contributor,
01:56you know, within the collection reports that have been ruled out by the MBS.
02:00And that is only suggestive of the fact that government has also leveraged, you know, tools, technological tools,
02:08you know, like the e-filing platform and all of that, all of the issues that those tools have grown up over the years are beginning to be resolved.
02:17You know, and that is what, that is what is making us see what we are then experiencing.
02:23We ended the year last year with 1.2 trillion.
02:27And post-quarter, we already had 1.4, which was about, I mean, which is about 19% increase.
02:33When you look at the number based on, you know, on quarter analysis.
02:41Quarter two, you already had 1.5, and here, end of quarter three, you already had 1.7 trillion,
02:47showing a whopping level of about 14% compared to what you had in Q2.
02:53So clearly, this is, these are all evidence of the fact that there is increased focus, you know, on the matters of taxation.
03:01And there are also increased efforts, you know, for the government to ensure that collections,
03:07all the bottlenecks around collections as much as possible are taken care of.
03:11And talking about taking care of all of the bottlenecks now, we still have issues when we're looking at our revenue generation,
03:17especially on the size of the 2025 budget and whether or not Nigeria has what it takes to truly fund the expenditure we have as of now.
03:26But going into other details of the tax reform bills at this point in time,
03:32yes, the parliament has suspended debate on it.
03:35The reforms committee says it's open to re-engaging.
03:40There is no withdrawal at this moment.
03:42But for you, I'd like you to speak to the areas of concerns, the highlights of these bills.
03:48Now, when we are talking about the prospects versus the curveballs or the concerns being raised,
03:55how do we find the right balance here?
03:59You're right, David. Everywhere in the world, change is usually a difficult thing.
04:03When you look at the robust nature of the bill, or the bills, I should say,
04:09and the structures that are going to be shifted and the changes that are going to be ushered in,
04:17if this eventually passes, you would understand the enormity of why some quarters may have concern.
04:26But by and large, there have been divided schools of thought.
04:30I mean, we've seen that the bill has passed second reading,
04:33even though it has now been referred to the Senate Committee on Finance for further review.
04:37But those concerns are not out of place.
04:40And that's where we need to start the conversations from.
04:45The very fact that something that had subsisted for quite a number of years is being challenged,
04:53or some quarters are having concern about them,
04:58is evident of the fact that the committee has done an extensive level of work,
05:08which then calls for further scrutiny and examination of the issues.
05:12And you look at provisions like saying those that, I mean,
05:16hennas of 300,000, amounts up to 300,000 will not be paid in taxes.
05:20I mean, those are provisions that you expect that people should, I mean, the Nigerian populace,
05:25especially those that are within that income bracket, should be happy about.
05:29But when you then go to areas of revenue sharing,
05:32you then see that because that is going to tilt a little bit away from what parties have been used to,
05:41there are bound to be challenges in that regard and pushback in those regards.
05:47My expectation generally is the fact that, I mean, we have a listening government,
05:51and that's part of what you have seen now.
05:54The bill itself has been passed to the Senate committee.
05:58It's expected that those concerns are reviewed,
06:01and see how much of the stakeholders' admissibility that can be done before matters resume again on them.
06:09Well, we'll leave the conversation here for now, Oladejo.
06:11That was Oladejo Adeyemi,
06:13policy director of commercial practice at Andersen Nigeria.