By Onyewuchi Ojinnaka
Senior Correspondent
ActionAid Nigeria (AAN), a non-governmental organisation and global movement of people working together to further human rights for all and defeat poverty, has called on the Federal Government to formulate a comprehensive and detailed national policy framework in consultation with the private sector for proper accounting of Corporate Social Responsibility (CSR) actions, sustainability of CSR related projects and programmes; and blockage of any tax leakage on account of CSR actions.
The group further requested that the proposed CSR enabling policy should provide for professional bodies, an independent validation of CSR expenditure on project and programme, adding that it will promote transparency and accountability in the reporting of CSR action and prevent incidence of CSR related tax evasion.
These are some of the recommendations on the outcome of the study and stakeholder consultations on Corporate Social Responsibility, Wages and Taxes at a two-day meeting between the Private Sector Companies, Community Stakeholders and Strenghtening Public Finance in Nigeria (STREPFIN) steering committee on CSR,Wages and Tax isssues which was held in Lagos recently.
ActionAid in collaboration with OXFAM initiated a project ‘ Financing for Development’ (F4D) which its overall goal is to improve policies and practices of both government and private sector which optimum result would be to reduce poverty and extreme inequality through more effective and efficient management of Nigeria’s rich resources and increased citizen participation.
Highlighting the observations and recommendations of the committee at a press conference after the meeting in Lagos, chairman of STREPFIN Mr David Nwachukwu explained that F4D project being implemented by ActionAid, works with both private and public sectors “especially those whose work and enterprises relate either directly or indirectly to tax administration in order to increase and widen tax base payers and bring more people into tax net”.
Nwachukwu said that the goal is to have more finance to government for funding development.
According to him, the committee observed that there is a clear linkage between CSR and taxation in terms of social infrastructure development and citizen well being, but added that the absence of policy framework on CSR sanctions could potentially create avenues for tax evasion by corporate organization.
It was further observed that CSR actions do not necessarily flow solely from community needs but rather based on joint company and community needs; that lack of incentive for CSR actions discourage continuity and sustainability of projects and programmes which could affect community development; that multiple taxation is a product of inadequate knowledge of tax payer and revenue authorities.
Consequent upon the observations, the study recommended that corporate organisations should allow CSR actions to be driven by community need assessment and national and sub-national development agenda so as to foster cohesion in the pursuit of relevant national development agenda particularly citizens welfare; that social audit of CSR should ensure value for money in the benefiting communities.
The government at national and sub-national levels are called to create industrial parks that will promote the establishment and competitive operation of micro, small and medium enterprises toward job creation, poverty reduction and national development.
The group recommended for sensitization of tax payer on their rights and obligations under the law in order to prevent incidencies of multiple taxations. Besides, government should strenghten the power of the Joint Tax Board (JTB) to enable them give full effect to the taxes and levies approved by laws of the Federation.