One of the indicators of a good tax system is the quality of tax administration – this includes the nature and frequency of tax audits and other compliance verification exercises, the nature and basis of tax assessments issued to taxpayers, the duration of the tax audit cycle, the manner in which tax disputes are resolved, etc. Tax authorities should be able to take on board taxpayers’ views and feedback on these indices in order to ensure that their tax practices are fair, equitable, and forward-looking.
We are, therefore, pleased to launch the maiden edition of this Tax Disputes Resolution Survey Report (“the Report”) prepared by KPMG in Nigeria. The Report serves as a feedback tool through which taxpayers are able to share their experiences (including pain points) on the salient issues impacting effective tax administration such as: multiplicity of tax compliance verification exercises, protraction of the tax audit cycle, slow adoption of technology in the tax audit process, etc. The Report also serves as a benchmark tool for taxpayers to assess their strategies and processes for mitigating tax risks and resolving tax disputes against those of other taxpayers.
We also hope that the Report will serve as a useful reference for the tax authorities as they seek to improve existing processes whilst mobilising revenue aggressively for the Government. This is particularly important as we have seen an increasing focus by the Government to ramp up tax revenue in order to shore up its dwindling revenue, occasioned in part by the Covid-19 pandemic. In the last 2 years, the Federal Government has signed into law, the Finance Acts 2019 and 2020, and subsequently issued taxrelated Executive Orders – the VAT Modification Order 2020, and the Companies Income Tax (Significant
Economic Presence) Order, 2020. On its part, the FIRS has issued various Circulars and Public Notices informing the general public of its position regarding the interpretation of the above pieces of legislation. Some of these publications have proven controversial and may be the subject of tax disputes in the future.
We also trust that our readers will glean some insights in managing their tax affairs proactively as they review their tax risks and tax dispute management frameworks. More importantly, however, taxpayers should be willing to affirm their rights by seeking judicial redress, if necessary, where non-litigious options have been exhausted. This is important to the development of our tax jurisprudence, which is still in its infancy.
We acknowledge and thank all the respondents that took out time to be part of this year’s survey. We look forward to your participation in subsequent editions. We encourage our readers to provide feedback on the publication and participate in the subsequent editions of the survey. You can send your comments or indication of your interest to participate in future surveys by sending an email to NG-FMKPMGGlobalTaxSurvey@ng.kpmg. com.
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