FIRS' Babatunde Fowler speaks on solutions to Africa's tax system

In Abuja, at the third international tax conference, Baba Tundifashola, the chairman of the Federal in Land Revenue Service, shared insights on how African countries can successfully implement tax policies. The conference brought together African commissioner generals and revenue agency heads to brainstorm on ways to enhance revenue generation. With many African nations facing challenges in funding their budgets due to a drop in natural asset prices, the focus has shifted towards increasing non-resource tax revenue streams. In Nigeria, efforts are being made to boost non-oil taxes, while other countries are working on diversifying their revenue sources. Over the past conferences, there has been a shift towards concentrating on non-resource tax revenue streams and monitoring investments to curb illicit financial flows. The exchange of ideas and information among tax administrators has proven beneficial in understanding the sources of funding for investors within African nations, thereby improving tax compliance. One of the major hurdles in Africa's tax system is the reluctance to embrace the tax culture. Unlike developed countries where tax evasion leads to jail time, African nations lack strong consequences for non-payment of taxes. The continent has historically relied on selling natural resources for revenue generation, neglecting the development of sustainable domestic tax regimes. This lack of consequence and overreliance on natural assets have contributed to the low rate of tax compliance in African countries. At the conference, stakeholders aim to foster collaborations and new ideas to enhance tax compliance and enforcement across African nations. By sharing information and forming new relationships, countries like Nigeria hope to address issues of tax evasion and ensure that individuals pay their fair share of taxes. Initiatives like the Voluntary Assets and Income Declaration Scheme (VAIDS) in Nigeria have been implemented to encourage tax compliance and deter defaulters with the threat of prosecution. As African nations work towards strengthening their tax systems, the collaboration among tax administrators becomes crucial. By exchanging best practices and implementing consequences for tax avoidance, the continent can pave the way for a more robust and sustainable tax culture. The outcomes of the conference are expected to include new insights, relationships, and strategies to boost tax revenue and ensure accountability in revenue generation across Africa.