Tax Tripods-What Drives The Tax Man.
YBTC News—Condiments are to any delicacy, just as tax tripods are to a tax system, without mincing words, they can either make or mar. While the former is easily relatable to, tax tripods are seldom spoken about, unless, of course, in a colloquium of “tax-brainiacs”, which seem to have more success in the confusion of lay-folks than in their enlightenment.
In view of this, this discourse is for the simple-minded, hence it can be likened to ‘tax-tripods-made-easy’ or ‘tax-tripods-for dummies’, whichever phrase is chosen, a simple understanding of tax tripods and its nexus with the tax-person, is the purview of this discourse. So, stay with us as we take you through it !
What Are Tax Tripods?
Tax tripods are basically the build up/constituents of every tax system. They include:
- Tax legislations
- Tax policies
- Tax administration
It is noteworthy that the “tax-fellow” in this context is a nick-name given to the authority or entity saddled with the responsibility of collecting taxes from various nooks and crannies of the tax net. The federal, state and local government tax-collecting entities, are commonly referred to as “tax-fellow.”
These are laws formulated to govern taxes derived from different tax subjects within the tax net. for instance, the Personal Income Tax Act is the law regulating taxes accrued to income from unincorporated bodies e.g sole proprietors, this also includes individuals who are salary earners, etc. another common tax legislation is the Petroleum Profit Tax Act; this is peculiar to companies involved in petroleum operations- just as the name connotes, ‘petroleum’.
The tax policies refer to principles that serve as a guide to the tax system-more like a manual.
Tax administration is the mechanism of governance put in place to give expression to the tax legislations and tax policies.
A succinct explanation that connects the three concepts is ; while the legislations regulate the system, the policies amplify the provisions of the law and give directives for the tax administration to function upon.
Tax-Fellow And The Condiments:
A tax-person in order to have a perfect tax system must ensure that each tripod is a reflection of the current developments in the society. The Nigerian tax system for example is plagued with tax evasion and avoidance, non-compliance to tax laws, archaic tax laws, to mention a few. The tax authority in correcting these plagues must pay heed to each tripod. How?
The laws for instance, must include more subjects into the tax nets other than the already formulated ones such as the personal income tax act, companies income tax act, etc. to garner more revenue for the system. policies to encourage payment of taxes such as VAIDS must be enforced and the proper machinery, in terms of technology and human capital should be made available for efficient administration.
Also Read:Tax Talk: Stamp Duties in Nigeria
Most importantly, while the tax-person is energized by a working tax system, nothing is more motivating than a transparent and proper utilization of the taxes collected. hence, the tax system is not without its tripods, albeit, a good governance is the fuel to all.
Thank you for joining us on thus week’s edition. Next week, we’ll look at Tax Concessions aa we proceed with Theme II of Tax Talk.
Till then, we look forward to your questions, comments and contributions.
Enjoy the rest of your week!
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