The Ease of Doing Manufacturing Business in Nigeria: The Role of Tax Authority (an Enlightenment of the Functions, Scope and Mode of Operations of FIRS)

Abstract

Tax is the soul of economy. When the tax system is crippled, the economy collapses. The over long dependence on monopolistic oil economy has deeply affected the level of tax compliance culture of Nigerians. Consequently, the recent attempt to increase revenue from non-oil sector and reduce non-compliance in paying tax as well as expand tax net by Federal Inland Revenue Service (FIRS) in Nigeria has been negatively construed by some circles as a hard approach that undermines the ease of doing business in Nigeria. This has led some persons and group of persons to begin to demand for more clarification and enlightenment on the functions, scope and mode of operations of FIRS so that their tax compliance level could be improved. It is as against this backdrop that this paper examines the ease of doing manufacturing business in Nigeria and the role of tax authority. This paper concludes that improvement in tax administration ease of doing business would likely increase tax compliance as well as tax revenue generation and in turn provide funds that can advance the functions of government towards promoting the objective of manufacturing industry, and which will in turn boost the ease of doing business in the sector. Among others, this paper recommends FIRS to have more effective and efficient structure of taxpayers’ service department that would support in addressing the taxpayers’ grievance and regularly educate all the stakeholders in improving tax compliance culture.

Keywords: Manufacturing business, tax authority, non-compliance, tax, Nigeria