At the annual PWC workshop for journalists held in Lagos yesterday, Taiwo Oyedele a senior partner in the firm revealed that government had put in place plans to track tax defaulters using phone bill records and Bank Verification Numbers (BVN).
Individuals who spent above a certain threshold on their phone bills, would be examined to ascertain their tax bills. The same method would also apply to individuals with Bank Verification Numbers (BVN). The Central Bank of Nigeria (CBN) had few years ago made BVNs compulsory for all account holders. Failure to register for the BVN led to freezing of bank accounts. The apex bank has however extended the registration deadline for Microfinance banks.
Why is government doing this ?
Tracking phone spending is a clear means of verifying wealth as richer individuals typically send more on phone bills. It also captures the informal sector which has largely not paid taxes.
A drop in crude oil prices and production volumes lead to a fall in government revenue, and pushed the economy into recession. In order to me it’s obligations, government has had to ramp up borrowing. $1.5 billion has been raised through Eurobonds, and two more but raises are billed before the end of the year. A N100 billion Sukuk bond was recently raised towards road construction.
Is privacy being violated?
Though some may argue that phone records are private, government has every right to ask for records belonging to the citizenry. Governments all over the world often use unconventional methods to get tax defaulters. Her Majesty’s Revenue Collection (HRMC) which is the body in charge of revenue collection in Britain and the Internal Revenue Service in the United States, monitors online social media accounts for ostentatious displays of wealth without any visible income.