A Rent Joint Tax Board Meeting in Abuja, Nigeria

By Giovanni Emephia

English political philosopher, John Locke, in his “Second Treatise of Government”, emphasized the fact that government exists for the sole purpose of promoting the public good, protecting the life, liberty and property of its people. This ‘Social Contract’ between citizens and government, or those entrusted with political power over citizens, puts sovereignty in the hands of the people to the extent that “the Civil State” is beholden to the people and has power over the people in so far as it exists to protect and preserve their welfare.

When we say ‘Welfare and Security’, these are generic terms that encompass all issues of development, peace, and national stability. The provision of public infrastructure, guaranteeing peace and security and providing basic amenities are the exclusive responsibilities of the government and require a dependable source of revenue to meet up with these and other needs, especially as the population of the country continues to expand and citizens demand better service from the government.

History and experts have shown that taxation is the most dependable source of funding for governments all over the world. Tax is defined simply as a compulsory contribution that an income earner, individual or corporate entity is compelled by law to pay to the government through an authorized legal entity for development and regulatory purposes.

The payment of tax is a mandatory statutory requirement at Section 4(f) of the1999 constitution, as amended, which provides that:

‘It shall be the duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax appropriately”.

Though the above refers to Personal Income Tax, there are other laws which extend the scope of taxation to corporate business entities. These include, but are not limited to, the company Income Tax Act, Education Tax Act, Capital Gains Act, Stamp Act, Petroleum Profits Tax Act, among others. It is with this background that the just concluded meeting of the Joint Tax Board becomes critical to tax administration in Nigeria, going forward.

The Joint Tax Board, JTB was established under the provisions of section 86(1) of the Personal Income Tax Act, PITA, of 2004 with the primary charge of “ensuring uniformity of standards and application of Personal Income Tax in Nigeria”. The JTB comprises the chairman, who usually is the Chief Executive Officer of the Federal Inland Revenue Service, and a representative of each of the 36 states.

As a result of the political structure of Nigeria which allows the existence of three distinct tiers of governmental authority (Federal, State and Local government), there are also a categorization of revenue collectible by the different tiers of government under the Exclusive, Concurrent and Residual lists. Thus, the need to ensure efficiency and uniformity in tax administration across the three tiers of government necessitated the establishment of the Joint Tax Board.

According to the collaborative framework of the Federal Inland Revenue Service, FIRS, and States Internal Revenue Service, SIRS, areas of collaboration include Identifying and locating taxpayers through sharing and exchange of information on taxpayers, and exchange of taxpayers’ databases; conducting joint audit exercise by FIRS and SIRS, and carrying out joint tax enlightenment exercises. Other areas of collaboration also include: “Sharing of Information concerning unremitted taxes discovered by either side, Joint Training Sessions and Programmes, as well as strengthening collaboration on areas of review and amendment of tax laws and legislation as may be required.”


It is in furtherance of the implementation of these areas of collaboration that the Joint Tax Board held its 150th meeting at the Transcorp Hilton Hotel, Abuja on Thursday, 23rd June, 2022 to essentially review the nation’s tax to Gross Domestic Product, GDP ratio.

According to Vice President Yemi Osinbajo at a public lecture organized by the Chartered Institute of Taxation of Nigeria in Abuja in February, 2022, “Nigeria’s eight percent Tax-to-Gross-Domestic product ratio is among the lowest globally. While our contemporaries are in the neighborhood of 16 to 25 percent, even in Africa”. The Vice President also mentioned that taxation as an important fiscal tool was a more sustainable means of achieving national development than oil.

However, the issue of tax evasion has continued to plague the country. The JTB’s meeting in June was essentially to “rally the troops” by mobilizing relevant stakeholders including the Independent National Electoral Commission, INEC, Code of Conduct Bureau and the Anti-corruption Agency, ICPC, to ensure that aspirants to public offices comply with the country’s constitution and relevant laws concerning taxation.

The JTB’s 150th meeting which was aptly themed “Effective Tax Compliance for Political Office holders, a Panacea for National Development”, was targeted mainly at the political class, who are believed to be one of the highest categories of tax evaders in Nigeria, or whose tax assessments are nothing close to their actual income.

However, the Acting Chairman of the JTB and Chairman of the Delta State Internal Revenue Service, Sir Monday Onyeme, posited that a more holistic approach to tax evasion by all sectors of the economy would be a better strategy in the long run. While admitting that there were issues of tax evasion among the political class, Sir Onyeme also asked business people with multiple streams of income outside their officially declared income not to short change the government by not declaring incomes from other sources. Calling it a ‘national malady’, the Acting Chairman noted that a continuous collaboration between relevant stakeholders like INEC, the Code of Conduct Bureau, National Identity Management Commission, the financial institutions and security agencies would greatly improve revenues accruing to government to meet its expenditure and infrastructural needs.

The JTB also recommended, among other measures, the amendment of the electoral act to ensure that those aspiring to public offices are required by law to be compliant with their tax obligations to the government. This view was espoused by o renowned tax expert, Mrs. Titilayo Fowokan who emphasized the need for a review of the social contract between leaders and the electorate and that government must develop the political will to empower the judiciary with the capacity to punish severely those who are discovered to have evaded tax.

According to Margaret and Chris [2009], taxes and tax systems are fundamental components of any attempt to build nations, and this is particularly the case in developing countries. The importance of taxation in good governance cannot be overemphasized. Apart from being a tool for revenue generation, taxation can also play an important role in stimulating other possible revenue sources for the government, and develop other areas of investments and economic activities from which the government can derive additional revenue for national development.

However, tax evasion through tax avoidance, failure to declare additional incomes by businessmen and other categories of citizens, failure to render appropriate tax returns to tax authorities, and other administrative loopholes tend to reduce drastically, revenue accruals to the government for developmental purposes. Some experts believe that the revenue lost to tax evasion and avoidance yearly in Nigeria is so humongous that armed robbery is like petty crime in comparison.

Tax evasion alters the distribution of income in an unpredictable manner. Unless tax evaders are caught and severely punished, they pay fewer taxes than honest taxpayers which negates one of the principles of taxation, which is fairness. Tax evasion contributes to feelings of unfair treatment and disrespect for the law, creating a self- generating cycle which feeds upon itself and leads to even more evasion, like a recurring decimal.

Thus, the Joint Tax Board, in order to go beyond just rhetoric, must ensure that its resolutions aimed at eliminating, or at least slowing down, this monster of tax evasion, not just among the political class, should be expanded to cover other sectors of the society, especially the informal sector which is mostly unregulated and unstructured.

The JTB must also look inwards at the issue of corruption in tax administration in Nigeria as taxpayers evade taxes by bribing their way out when found out. Tackling corruption would ease the burden of tax administration as the incidences of corruption result in huge revenue losses for governments at all levels.

Finally, lack of adequate information and accounting systems represent another factor which contributes to non-compliance. In spite of the gradual transition into a cashless economy, a huge part of the informal economy is still cash-based as business transactions are done in cash, characterized by low level of literacy and indifference to proper record keeping by informal sector operators as well as poor reporting standards.


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