Full version of an exclusive interview with the Chairman, CITN Jos District & Society, Isaac Wadak
By Joseph Adudu
Isaac Wadak, a retired Permanent Secretary, a Politician and tax consultant is currently the Chairman of the Chartered Institute of Taxation of Nigeria (CITN), Jos District and Society. In this exclusive interview with African Drum, he bares his mind on the recent increase Value Added Tax from 5 percent to 7 percent. He says tax remains the pillar for development for any serious economy because it’ s timeless unlike other sources of income (Oil inclusive) which have life span and therefore, have terminal point. Wadak also calls on Public office holders to shun profligacy and ensure judicious use of public funds to encourage payment of taxes. Enjoy the excerpts.
Congratulations once more on your election as Chairman, Charted Institute of Taxation of Nigeria, Jos District and Society.
Sir, the Federal Government recently announced an increase in the Value Added Tax from 5 percent to 7 percent. Is this a good or bad omen for the Country?
First of all, it’s important I clear the air by saying that the implementation of the proposed increase in VAT has not started. It is still at the proposed stage. If you listened carefully, the Hon. Minister, during the pronouncement said there was going to be wide consultations between then and December 2019. All things being equal, the actual time for the implementation would be January 2020. VAT is a law, so the necessary procedures and amendment in terms of legislation has to be done so as to effect implementation.
My take is that it is a welcome development because we have been applying the 5 percent for more than 20 years. So, it’s a welcome development and I also believe it’s good for the economy.
There is also this argument by pundits that in the whole of Africa, our rate is the lowest, but I have my personal thoughts regarding that line of argument.
How true is the Government’s position that VAT is applicable or charged only on luxury items and services and therefore, does not in anyway affects the common man?
That is true only to the extend of the statement. It is true that if you don’t consume luxury items you don’t have to pay the tax but if you take into cognizance the multiplier effect, you would realize that it affects the common man indirectly because the luxury items and services are mostly consumed by political appointees and public servants and the bills settled are not from their personal funds but from public treasury which is a pool of tax payers. Ask yourself, who are the consumers of luxury services in expensive hotels and other places? It’s the political appointees and other public officers. Take for instance, a political appointee stays the night in an expensive hotel and the next day he is given a bill of N500,000. Does he pay the bill from his personal income? No. The bill is settled from the tax payers’ money. The tax paid by the common man. So, this area of profligacy by public officers and other political appointees is our major area of concern. The way out is for Government appointees to understand that they need to cut down on their consumption of luxury items and services. Also, Government needs to explain to the people of Nigeria what they intend to do for them with what would be realized from the 7 percent increase and must keep to their promise so that the people would have trust and confidence in the Government and gladly pay their taxes.
Has your institute forwarded this advice to the Government?
Yes, we have spoken quite a lot on this. Also, what we keep telling government is that it’s not all about over taxing the people but expanding the tax base by bringing more people into the tax net which is far better than increase of tax. By bringing more people into the tax net, that would yield more revenue. For couple of months, we have noticed different types of tax policies playing out and I feel it’s not too good for an economy that is just coming out of recession. I have often used the phrase ‘ Government would just tax poverty’ and somebody once told me, oh, that’s a good expression and it’s the truth. We don’t produce, we only consume yet the government is busy taxing people. You are a journalist and you must have been following events relating to Taxes of recent. There has been the issue of increase in bank charges on both deposits and withdrawals; there is the issue of Police Trust Fund and there is also the issue of Communication tax. And all these came simultaneously during a period of recession, (though some people are saying we are recovering). That’s okay. Let us recover fully first; let the economy grow thereafter, the government can begin to tax. But for now, honestly speaking, I believe we are just taxing poverty.
Recently, the President of CITN, Dame Gladys Olajumoke Simplice was in Jos and harped on the need for organisations to engage only your members as tax consultants, could you shed more light on this?
Yes, the call is timely because from the findings of the institute, there are so many quakes parading themselves as professionals. So, there is the need sanitize the system. Consequently, it is a call to standardised and professionalised. We in the Jos District have been working hard to engaged stakeholders with a view to finding a lasting solution to the issue. You see, this tax thing stands on three legs. One leg is the tax administration ( that is the Board of Internal Revenue), the second leg are the Practitioners ( Professional) and the third leg are the Tax Payers. So, we sit on that tripod. We in the CITN have been engaging stakeholders. For the professionals, they have formed what is called ‘ Jos Tax Practitioners Forum’ and the main objective of the forum is to ensure professionalism in the practice of taxation as enshrined in the Charter of the CITN.
Apart from the issue of quackery, what other challenge the Jos District has experienced?
The challenge of membership drive. The Jos District is a new Society and has been working hard to get more members. We have been encouraging people especially accountants who are not members of CITN to join. We have also been talking to ICAN and ANAN and happy to say that CITN and ANAN have an MoU to the effect that if a person has ANAN certificate can gain direct entry to CITN. As a matter of fact, you can even apply for practitioner license and you will be issued with same. The only thing that must be done before issuing the license is the induction course. So, we are leveraging on that MoU. We have also set up education committee that is setting up study and examination centres. When that finally takes off, we would have many students sitting for the professional examination. Let me tell you, tax is the present and future of this country. Oil has its lifespan but not so with tax. It is for this reason that our colleagues in accounting and other related profession have been trying to ensure that they switch and specialized in taxation because they understand taxation is the future of this country. Of course, many of them have been in the practice of taxation but CITN is saying that was in the past. Now that we have a Charter, if you want to practice, you need to get a license. And I must tell you that as it is at the moment, most of them are in the process of registering with CITN so they can get their license.
Sir, your advice to all regarding tax and taxation?
You see, I have always said there are three things that are inevitable to a human being and they are; birth, tax and dead. Whether you like or not, you must be born before you exist; whether you like it or not, you must pay tax in one way or the other and whether you like it or not, one day, you will die. Take note of this. As a journalist, as soon as you leave here and before getting to your destination irrespective of how you chose your movement, you must pay one form of tax in one way or the other. So, tax is a permanent thing in life. You can’t escape it. My advice therefore is that people and organizations must begin to engage professionals on tax matters because you would always have one or two problems with RTAs (Relevant Tax Authorities). That’s why you need a consultant at all time to help in mediating between the tax payer and the RTA. You would always need a tax consultant because people on their own, would not even understand the technicality and jargons involved.
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