Managing Partner of Ecovis OUC, a tax and auditing consulting firm, Mr Andrew Uviase, shares his perspectives on the foreign exchange market, fuel subsidy removal, and other challenges facing the economy, in this interview with EGOLE ANOZIE

What would you advise the Federal Government to make the focus of its tax revenue drive considering the country desperately needs to increase tax revenue to service its huge debt and fund infrastructure growth?

The mantra or focus of government tax revenue drive should be voluntary compliance through participatory tax drive process. This approach requires going back to the basis and interrogating the status quo of non-quid pro quo which presupposes that tax is not paid in exchange for value.  Rather than making tax payment to be a legal requirement that must be complied with, the government should make people see taxation as a payment for something of immediate value. The government must adopt a deliberate effort for people to see some quick gains as a result of their tax payments. Let’s take the roads as an example. There must be some deliberate efforts to ensure that failed portions of the roads are fixed immediately. So, when people see the benefits and with the right socialization process, Revenue collections will be enhanced. We should adopt a mantra such as we all win when we pay taxes.

What key tax initiatives and programmes would you advise the govt to quickly introduce as part of its tax revenue growth drive?

The most important aspect of revenue drive is to leverage on technology to drive the revenue generation process. As we all know, there is no meaningful transaction that can be executed outside of the banking system today. Moreso, the tax laws are structured in such a way that there are few transactions that can take place without tax payment by either the receiver or the payer or both. So, if for example you look at the transactions that flow through the banking system today and compare with the actual tax accruing, you will observe that there are significant gaps that can and should be bridged. Of course, there is a need for improvement in human capacity and the need for more transparency in government business.  There should be serious collaboration among governments departments and agencies such that the tax collection agencies will have unfettered access to information from all the other government agencies. I believe that with the right synergy tax revenues will rise remarkably.  Lastly, it is important to consider waiver of backlog interest and penalties that businesses are not able to pay. The condition for such a waiver will be the immediate payment of the principal amount. It is expected that such magnanimity on the part of government will immediately lead to the inflow of uncollected taxes that will lead to significant increase in collections and enhanced image for the revenue collection authorities.

Accounting and accountability have been a major issue in Nigeria, what advice do you have for govt and private sector players in this regard?

The challenge most businesses and government establishment have today is the urge to have quick fixes to issues bordering on accountability. This approach cannot work. The better way would be to have clearly defined policies and procedures for all functions of the business process (whether government and private) and then put in place control points to ensure that the systems are functioning properly. Finally, businesses must ensure that their monitoring mechanisms are functioning properly. This is important because no matter how well-designed systems are, the control mechanisms can sometimes fail. This is why monitoring comes in to be able to detect anymalfunctioning aspect of the systems. Always ensure that the monitoring mechanism is functioning properly.

Amid the current weak economic growth and high inflation, how can firms and state govts raise capital at very low interest rates?

As for the private sector, they will need to consider raising equity capital to shore up their funding requirements. This is the most advisable route whenever it is practicable. For firms with the right access to capital, they should raise foreign finance whenever possible. The interest rates are generally lower with foreign finance. Of course, they should raise long-term mix capital funds that can be converted in nature over time. What is important is scaling through this period as the future will be bright. State governments should seek to enhance their internally generated revenue. The states should also do a proper cost-benefit analysis of projects before raising funds. If the exercise is properly done, they could source finance for specific projects which will eventually pay back the cost of finance. The states must also reduce waste in governance. It takes two blades for scissors to cut paper. If they are only generating revenue without looking at the cost,increases in revenue will not have any meaningful impact on their economy.

Many states in Nigeria are currently battling low IGR, what can they do to raise their IGRs and plug leakages as they step up efforts to maintain good balance sheets?

The starting point for most states is to improve their data collection process so that they can correctly know their tax base. It is pretty easy for state governments to know the tax base of their states. For example, every state government has a fair knowledge of all the business entities operating in their state. They have information about their employees and their remuneration pattern. They can also leverage other data collection points like the NIN database, Federal Road Safety Commission database and even the state motor licensingoffice database. With the right data collection system, they can to a largeextent bridge the gap between the potential revenue collection and the actual they are collecting. It will also eliminate leakages and sharp practices in the revenue collection cycle because the notional collectable revenue will always be compared with actual collections and an explanation sought for the difference.

Several economic agents appear to be worried about the foreign exchange market, especially considering the falling value of the naira. What do you think is wrong and what can be done?

I think the policy of the current administration is to allow market forces of demand and supply to determine the value of the naira. Theoretically, market forces are the most suitable mechanism for allocating scarce resources and for correcting distortions in the forex market. However, this position rests on a critical assumption of many economic agents on both the demand and supply side. That is the assumption of perfect competition. Unfortunately, the assumption does not hold for the forex market because, whereas there are many people on the demand side, supply is inelastic because of the productive base. Therefore, supply will not increase in response to price. Increases in price (I mean lowering the value of the naira), in relation to other currencies can only lead to inflation as we are presently witnessing because we do not have the productive base to earn more dollars. This is what we call market failure, which is the inability of the market to allocate resources efficiently. I will, therefore, strongly recommend that the government should revert to a managed float by channelling our scarce forex resources to the productive sectors.

How do you think that the challenges of development can be overcome in Nigeria?

Personally, I tend to think that the greatest impediment to our development is a lack of discipline. Specifically, we must return to the discipline of planning where there is a deliberate effort to set quantifiable targets over a given period of time. Moreso, government must be seen as a continuum when an incoming government sees the policies and programmes of its predecessor as national matters that must be driven to a logical conclusion. Historically, we can see that the greatest developments in the country happened during the period of development plans in the 70’s.

What are the implications of the removal of fuel subsidy on the economy?

This is one of the best things that has happened to the economy in recent times. The removal has in the short-term freed resources for the government at various levels to run the country. In the long term, it will also help us to channel resources to the more productive sectors of the Midstream/Downstream subsectors of the Oil and Gas industry. However, it has created inflationary pressures and general difficulties in the country. Sometimes, I tend to believe that it would have been better to address the supply side by fixing the refineries before removing the fuel subsidy. This is so because what we have now is more difficult to manage. We have fuel imports exerting pressure on foreign exchange, which puts pressure on fuel prices, which again increases the cost of imports, and the cycle continues. At this rate, it is increasingly becoming more difficult to control the price without some form of government intervention.

How would you assess the way economic managers have been handling our challenges?

Coming into the market at this time is part of our little way of joining forces with the current administration to turn things around. Quite frankly, 100 days is too short in the life of an administration to be able to correctly assess the impact of its policies. However, we can say that so far, so good. We must commend the bold steps taken by the current administration thus far in the areas of fuel subsidy removal, the inauguration of tax reforms committee, and foreign exchange liberalisation policies. We believe that if the policies are properly managed and implemented, the economy will soon begin an upward swing.

In what ways do you plan to contribute to the growth and success of Nigerian businesses?

Our mission is to empower Nigerian businesses to excel on both local and global fronts. By uniting international expertise with local insights, we equip businesses with the tools to surmount challenges and seize opportunities. Whether it’s tax consultation, accounting, auditing, or compliance advice, Ecovis OUC is committed to delivering comprehensive solutions that foster growth and success.

Can you explain the significance of Kreston OUC’s transformation into Ecovis OUC for the Nigerian business community?

Certainly, this transformation marks a pivotal moment for the Nigerian business landscape. By adopting the name Ecovis OUC, we align ourselves with the global Ecovis network, renowned for its Continental European heritage and exceptional expertise and service delivery. This transition brings together international excellence with local insights, offering Nigerian businesses unparalleled consulting services tailored to their unique needs and challenges.

How will your company’s rebranding impact businesses on a local level?

The transformation to Ecovis OUC presents Nigerian businesses with a distinct “home advantage.” Operating in over 80 countries, including Nigeria, we are poised to offer immediate international and local support. Whether yours is an established international business dealing with cross-border issues, a family-owned company, the branch of a major corporation or a government organisation, Ecovis is at your side wherever your business takes you. With Ecovis, you will always have a home advantage. Being there means less communication hassle and increases our understanding of your special situation. We aim to work in partnership with businesses to provide the support and accessibility of a small company with the wealth of experience that can be expected from a global organisation.

This obliterates communication barriers and bolsters our comprehension of the local business terrain, allowing us to seamlessly provide bespoke solutions aligned with the Nigerian context and international realities.

Could you shed light on your firm’s approach to personalised consultation?

In Ecovis, we believe that the best ideas are born through dialogue. That is why we prefer to talk with our clients face-to-face and partner with them. In business, be it national or international, success depends on having a partner you can deal with, working at the same level and with an extensive understanding of your concerns and opportunities. Your personal advisor at Ecovis is himself an experienced businessperson. Together, you share a common bond on which trust and mutual respect are developed, which allows your business to reach its full potential. At Ecovis OUC, we recognise that every business is unique. This is why we assign each client a personal advisor—an adept business professional who understands both local intricacies and international trends. These advisors have immediate access to our expansive network of experts, ensuring clients receive holistic solutions finely attuned to their specific requirements. We are always at the deal table with our clients. That is the entrepreneurial approach to consulting. We are partners with our clients in finding unique solutions to their business challenges.

What benefits can Nigerian businesses expect from the rebranding?

The benefits are manifold. Firstly, our integration into the Ecovis network grants Nigerian businesses access to a wealth of international expertise, while retaining the advantage of local insights. This ensures a seamless navigation of both global and local intricacies. Secondly, our bespoke solutions cater comprehensively to businesses of all sizes, addressing, fiscal, managerial, and administrative concerns. Moreover, the personalised consultation we provide, supported by a network of over 10,000 experts worldwide, ensures clients receive well-rounded solutions for their distinct challenges. At Ecovis, our strength lies in our ability to truly understand our clients, extend a helping hand, and communicate in a language that resonates with them. We go beyond the role of mere advisors; we aspire to be genuine business partners. Our aim is not only to assist clients in navigating challenges or finding solutions but to proactively showcase the potential that can drive their success. This proactive approach is embedded in our DNA. When we speak of partnering with our clients, we also mean that the entire Ecovis network partners with them. This collaboration ensures that wherever their ventures take them, we are there as guides, facilitating well-informed business decisions. Our commitment to our clients is unwavering. We take the time to truly know them, immersing ourselves in their operations, understanding their organisational intricacies, and meeting their unique demands. Our connection to the extensive Ecovis network across the globe empowers us to cater to their requirements across different jurisdictions whenever the need arises.

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