Mrs Titilayo Fowokan takes over leadership of Society of Women in Taxation (SWIT) as the third Chairperson of Lagos state chapter.
An investiture was held in her honour in Lagos to mark the commencement of the new executive committee members. Mr Albert Folorunsho, Managing Consultant in Pedabo with over 20 years of professional experience in Taxation insolvency practice and management consultancy, was the guest speaker of Fowokan's investiture. He spoke on “Global Tax Drive: Compliance For Foreign Direct Investment in Nigeria.”
In the keynote address, Folorunsho explained that global tax drive had become a necessity because multinational enterprises (MNE) are taking advanyage of loopholes in local laws as well as exploiting gaps in Taxation treaties where they exist for their benefits.
He said e-commerce and globalisation have made it possible for entities to arrange their businesses in a way that they can obtain tax benefits in many jurisdictions.
Speaking further, he said existence of tax havens is depriving host nations of entity in MNE group that created value and rivalry among nations, with the eagerness to attract foreign direct investments forcing some jurisdictions to reduce their rates.
Folorunsho stated that each country has its own tax system defined by its jurisdiction and national tax laws, while the Organization of Economic Cooperation and Development (OECD) and the United Nations tax model convention provide guides on how sovereign state should interact with each other.
He specifically stated that they are not tax laws but mere guides and that the mandate given to G20/OECD to curb profit sharing gave rise to the Base Erosion and Profit Shifting (BEPS) projects.
He said the projects has 15 action points, which he categorised as the tax challenges of a digital economy, the hybrid mistmach, controlled foreign corporation (CFC) rules, limitation of Interest, deductions, prevention of harmful tax practices, prevention of harmful tax practices, prevention of treaty abuse, prevention of the avoidance of permanent establishment status, intangible assets, capital and risks and other transfer pricing issues, data analysis and collection regarding the scale and economic impact of the BEPS project, mandatory disclosure of aggressive tax planning schemes, transfer pricing of document and country by country reporting, dispute avoidance and dispute resolution and development of a multilateral instrument for the implementation of BEPS action points.
Speaking further Folorunsho said that dividend tax, multiplicity of taxation by various organs of government, lack of advance tax rulings on certain issues to provide to investors, wrong interpretation and application of tax laws, ambiguity in tax laws are some of the issues negatively affecting foreign direct investment (FDI) in Nigeria.
He however recommend the use of tax friendly jurisdiction that are financial service centres which cater for the needs of investors.
He concluded by saying Nigeria cannot achieve her full potentials by increasing tax revenue alone. He however advised that government in its effort to increase revenue generation through taxation should always be mindful of its impact on the economic growth driver one of which is the foreign direct investment
According to Fowokan, the thrust of the investiture was international taxation.
She said that across the globe, many businesses are done via the tax net, thereby making it impossible for tax evaders to avoid tax payment.
The SWIT chief explained that with global tax drive, more companies comply by paying their taxes.
"Since their accounts are no longer private, they are now visible and can be seen and viewed by everyone," she added.
Fowokan stressed that with these methods in place, multinationals will be more dispose towards obeying the nation's tax laws and recognise government willingness to punish defaulters and offenders, whether foreigners or Nigerians.
She said once tax affairs are open, it is easy to access a tax payers account to know where they actually belong.
She said: "As the Foreign direct investment (FDI) are coming to Nigeria, they are not just coming to get our resources. We are also getting our own fair share of the tax that belongs to the country."
This, she said, is the whole essence of what her investiture intend to achieve.
"As we are attracting foreign investors, we want them to contribute to our economy by paying their own fair share of their tax," she said.
Fowokan pointed out that when all these are in place, it will encourage foreign investment into the country.
Speaking on the impart of the revenue generated, the tax expert said there will be employment and empowerment.
Fowokan said: "We will have more productive capacity coming into place, since more indigenes will be employed. As our companies increase and do more business, taxes are being paid. Without income, there are no tax. We will also ensure that they don't take away out money."