The President, Chartered Institute of Taxation of Nigeria, Olajumoke Simplice, has said the common reporting standard on tax adopted by the country can help to solve fiscal deficit challenges.
She spoke during a webinar on the common reporting standards adopted by Nigeria.
Simplice said, “At a time when Nigeria is faced with widening fiscal deficit, it is quite certain that we stand to gain a lot from the agreement.
“Therefore, it is expected that the tax authorities would deploy available means, including this framework, to increase revenue collection and curb tax evasion and avoidance.”
She recalled that Nigeria signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information, on August 17, 2017.
The objective of the MCAA was to create a framework for the systematic and periodic transmission of bulk taxpayer information by the source country to the country of residence of the taxpayer, she said.
As noted by the OECD, she said, “The convention is the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance.
“It facilitates international co-operation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers.”
According to her, it provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes.
This co-operation ranged from exchange of information, including automatic exchanges, to the recovery of foreign tax claims, she said.
She said the Federal Inland Revenue Service issued the Income Tax (Common Reporting Standard) Regulations, 2019 (CRS Regulations).
According to Simplice, financial institutions in Nigeria such as banks, investment entities (asset/portfolio managers) and insurance companies now have additional statutory obligations under the CRS.