Tajudeen Akande is Senior Partner at PKF Nigeria (PKF Professional Services) and a member of PKF International - a global network of legally independent accounting/business advisory firms bound together by a shared commitment to quality, integrity and the creation of clarity in a complex regulatory environment. Here, Mr. Akande tells us about the transformation of the tax system in Nigeria, as well as the challenges of providing tax advice in the African country.

What would you say are the challenges of providing effective accounting and tax advice in Nigeria?

The main challenges of providing effective accounting and tax services in Nigeria include:

• The Economic situation of the country, which has constrained people’s ability to pay for professional service, having to, in most cases, resort to use of quacks and unqualified people.
• Regulators – Professional accountants in Nigeria are regulated by the Financial Reporting Council of Nigeria (FRCN) as well as two professional accountancy organisations operating in the jurisdiction—the Association of National Accountants of Nigeria (ANAN) and the Institute of Chartered Accountants of Nigeria (ICAN), and of course there is the Chartered Institute of Taxation. The multiplicity of bodies saddled with the responsibility of regulating the practice of accounting and taxation is a challenge to practitioners in terms of proper monitoring and discipline of erring members.
• Challenges in the area of tax practice include:
• Lack of clarity on taxation powers of each level of government (There are three tiers of Government in Nigeria);
• Insufficient information available to taxpayers on tax compliance requirements thus creating uncertainty and non-compliance;
• Use of aggressive and unorthodox methods for tax collection by tax authorities;
• Failure by tax authorities to honour refund obligations to taxpayers.

How has the tax system in Nigeria transformed throughout the years?

Nigeria’s tax system has evolved a lot over the years - from the pre-colonial era to the latest tax reform codified into a National Tax Policy.

In the traditional Nigerian society, the formalisation of taxation was practically non-existent. Citizens were only exposed to a variety of levies as dictated by paramount rulers and different traditional rulers created their different forms of taxes and levies.

To achieve conformity and uniformity in taxation, Raisman Commission was set up in 1958 by the colonial Government, which advised that basic income tax principles should be introduced and standardised across the country, which was accepted by the Government. Thus, direct taxation was incorporated into the constitution of the Federal Republic of Nigeria, after which the Companies Income Tax Act and Income Management Act of 1961 were established. This marked the foundation of Nigeria’s modern tax laws.

As a result of the increasing complexities in commercial transactions and glaring issues relating to practical interpretations of the laws, the Acts were repealed and reenacted giving rise to Companies Income tax Act CAP C21 LFN 2004 and the Personal Income tax Act CAP P8 LFN 2004, as well as other tax regulations which have changed the face of tax administration and practice in Nigeria.

Nigerian taxes are currently administered through the three levels of Government, as outlined in the Taxes and Levies (Approved List for Collection) Act (Amendment) Order of 2015.

The National Tax Policy (NTP) was first published in 2012, as part of the efforts to entrench a robust and efficient tax system in Nigeria. This was reviewed in 2016 in response to the rapidly changing commercial environment and persistent low tax to Gross Domestic Product (GDP) ratio.

Recently, Nigerian tax administration has been reshaped and expanded to focus on international tax. Various measures have been put in place to curb base erosion and profit shifting, so as to improve government revenue. Some of these measures include Transfer Pricing Regulations, Double Tax Treaties and Multilateral Agreements. Also, the tax payment system has been automated. Tax payers can now pay, generate receipts and even file tax returns and obtain Tax Clearance Certificate (TCC) online.

What are PFK Professional Services’ philosophy and top priorities towards its clients? How has this evolved over the years?

PKF is a global family of entrepreneurial minds working together, pooling our collective resources, experience and skillsets to add significant value to clients. We combine our understanding of local regulations, international perspectives and grasp of niche markets to create a simple, seamlessly executed approach. When you engage with PKF, you can be confident that the work will be carried out by dedicated and experienced professionals. We know the importance of having teams who have real sector experience.

The PKF ethos is about working together. We believe in giving teams the same encouragement as the individuals within them. We pursue a philosophy of shared responsibility and shared success. The most distinctive feature of PKF practice is our attitude towards our clients. Our people are good at building and developing relationships. This means getting to know our client’s organisation to understand their long-term needs.

Website: https://www.pkf.com/pkf-offices/africa/nigeria/pkf-professional-services-ng-lagos/

To hear about real estate and construction in Africa, Finance Monthly reached out to the Executive Director of Tanzania-based Epitome Architects Ltd. - Nuru Susan Nyerere – Inyangete. Established in 1998, the company provides architectural, interior design, planning, contract administration and project management consultancy services. At Epitome, Nuru is in charge of design, procurement (especially international), quality assurance, whilst she also heads the company’s Real Estate Development wing in Nigeria.

What would you say are the most common types of projects that you work on?

We are not geared for a specific building type as in Tanzania, like many African countries, the economy is not big enough to sustain architects who are specialised in a specific building type. Thus, we have built a team with the capacity to successfully undertake a variety of projects.

We are very fortunate to work on a wide variety of building types i.e. corporate buildings (for both private and public clients); commercial and mixed use. We’ve also worked on petrol stations, banks, schools and universities, residential buildings – and the list goes on. We are one of the few Architectural firms in Tanzania that have worked on a number of health related projects.

Additionally, our portfolio also includes international projects such as Utako Bus Terminal in Abuja, Nigeria and Rwanda People’s Bank in Kigali.

Our work ethic and drive to satisfy our clients have enabled us to get numerous word-of-mouth referrals.

What specific tactics do you implement when assisting clients with development strategies?

• The desire and interest of our clients is our priority and we guide them by understanding their ambitions in order to deliver solutions that satisfy their expectations.
• We undertake extensive research based on client expectations and spend a good deal of time with them. This forms the basis of our execution plan.
• We have a passionate, highly skilled, multi-disciplinary team of professionals with international experience whose quality of work epitomises our services.
• The hallmark of our service is built on uncompromising adherence to contracts, development controls, regulations, best practice guidelines and documentation.
• We set out to educate our clients on the actual role of an architect in a development project.

What are the challenges that your clients typically face prior to embarking on a new project, in relation to laws and regulations?

A key challenge for our clients is matching their expectations and needs to the resources available, the regulatory requirements and the cost of compliance.

Processing of Statutory approvals like building permits, change of use (where change of developments use is required) is long drawn out and bureaucratic. In addition, every project needs to register with various regulatory bodies like AQRB, ERB, CRB and also undertake studies such as Environmental Impact Assessments (EIA), all of which are costly. Additionally, if the project involves acquisition of funds, the process may take longer than the client’s timeframe.

In regards to building laws and regulations, a potential challenge can relate to gaps in legislation, such as the absence of building codes for example. Change in policies can also cause numerous issues for our clients.

Do you have a mantra or motto you live by when it comes to helping your clients with the development of a project?

Our Motto is: ‘Strive for excellence regardless of project size’. Our business ethos is built on being loyal to our clients and the profession in our advice from the outset and our clients appreciates this.

Despite its significant economic growth and vast oil riches, Nigeria has struggled to fight poverty in the past three decades. Finance Monthly had the privilege to speak to Godwin Ehigiamusoe, a man who’s devoted his career to helping the poor and the vulnerable people of Nigeria.

LAPO (Lift Above Poverty Organization) is a non-profit community development organization committed to the social, health and economic empowerment of the poor and vulnerable. Please tell us about the company’s beginnings.

Lift Above Poverty Organization (LAPO) was initiated to address the challenges that the poor and the vulnerable are facing. I established the company in Ogwashi-Uku, Delta State in late 1980s in response to the increasing level of poverty arising from the implementation of the central components of the Structural Adjustment Programme (SAP). These components of SAP were the first devaluation of the national currency - the Naira; and rationalization of workforce in the public sector. The impact of programme implementation on poverty was enormous. For example, the number of Nigerians living below the poverty line rose from 18 million in 1980 to 67 million in 1996[1].

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In mid-2010, we established LAPO Microfinance Bank- a premium Microfinance Bank. LAPO has also capitalized LAPO Microfinance Company in Sierra-Leone. The bank’s superior performance has been powered by flexible institutional structures and processes which effectively engage members of low-income households; owners of micro and small enterprises.

What are LAPO Microfinance Bank’s key priorities towards its clients? How has this evolved over the years?

LAPO Microfinance Bank prioritizes access to a range of responsive financial services particularly, micro loans. It has also committed enormous investments in client support activities and clean energy lending. LAPO Microfinance Bank provides basic micro-business management services to clients who are owners of micro and small scale enterprise. It facilitates access to insurance policies for poor clients. Its credit plus approach to service delivery is informed by the fact that low income people, particularly women contend with challenges beside lack of access to finance. Over the years, LAPO has expanded its loan portfolio from few products to a basket of responsive products. They range from farming to affordable housing and education loans.

How have the LAPO Microfinance Bank’s service offerings evolved?

Like most microfinance institutions, LAPO at inception started with mono-product which was a working capital loan for micro and small businesses. In its 5-year plan (2013-2017), LAPO Microfinance Bank prioritised product diversification. As a result, a number of credit and deposit products have been developed and offered to meet the varied financial needs of low-income people, micro and small businesses. LAPO Microfinance Bank is currently deploying alternative financial delivery channels to expand its outreach.

As CEO, how do you advise your team to make the correct decisions for the company alongside clients?

I emphasize client engagement which consists of regular interaction and assessment of their current and emerging needs. Other steps include efficient service delivery and effective performance management. I also prioritize innovations with the creation of Innovation Lab. Staff members are empowered with various training and capacity development programmes. They are encouraged and indeed involved in goal setting and a periodic performance review.

What are your plans for the company for the rest of 2017 and beyond?

LAPO Microfinance Bank shall seek to extend its range of services to actors in the rural economy. This is understandable; Microfinance should be made relevant to agriculture in Africa, given the fact that a large number of Africans engage in agriculture and allied activities. A range of products will be offered to meet the financial needs of the various segments in the agriculture value chain. We plan to deepen our cleaning energy lending in the coming years.

Your job must be very rewarding. Is this the motivation that drives you?

 Indeed – the past three decades of engagement with poverty lending have been full of excitement. There is certainly a sense of fulfillment.

I am driven largely by the desire to address the scourge of poverty. This informed my decision to set up the organization in the first place, and has continued to propel my desire to scale up to reach a large number of low-income people and offer them a range of empowering products and services.

Website: http://www.lapo-nigeria.org/

[1] In Poverty and Microfinance in Nigeria (2000) by Godwin Ehigiamusoe