Tax dialogues, which provide a platform for the exchange of diverse ideas on taxation, have been described as a tool for engendering tax compliance through collective ownership of the tax system, as well as a means to strengthen tax systems.
Speaking at the 2022 Kaduna State Tax Dialogue, held in Kaduna State recently, Mr. Muhammad Nami, Executive Chairman of the Federal Inland Revenue Service (FIRS) stated that dialoguing on tax was very necessary for inclusivity, fairness and pooling expert ideas to aid tax policy formulation, which ultimately strengthens tax administration.
“Dialoguing on tax is very important for many reasons,” he stated.
“Tax dialogue is a multi-sided communication channel that enables every view to taxation be aired and considered. By so doing, it lends itself to inclusiveness in the design and implementation of the tax system thereby engendering the spirit of collective ownership which, ultimately, promotes voluntary tax compliance.
“Dialoguing on tax prevents destructive conflicts as no one feels cheated or unfairly treated.
“Examples from history are rife on the importance of engagements on tax issues. For instance, the then British Parliament passed the Tea Act which constrained Americans to buy tea on which duty had been paid without dialoguing with the people. Consequently, the Act was rejected. According to Richard Murphy, in his book — the “Joy of Tax” —, one of the complaints cited by those who signed the Declaration of Independence in 1776 was ‘The King which was imposing taxes on us without our Consent’.
“When governments do not dialogue with the people on the taxes they wish to impose, they create room for conflict and even rebuff.
“Crucially, tax dialogue provides the platform for pooling expert ideas to aid tax policy formulation, review of tax laws and ultimately the strengthening of tax administration,” Mr. Nami said.