What is an Ombudsman?
An ombudsman is an official appointed by the government that is responsible for investigating complaints by private citizens against businesses, financial institutions, universities, government ministries, departments and agencies, or other public entities, and attempts to resolve the disputes or concerns raised, either by mediation or by making recommendations. The ombudsman renders these services for free to individuals who may understand the laws and lack the financial capabilities to hire an expert.
Ombudsmen may have different names in different. Countries. They may be called public advocate or national defender.
There are different types of ombudsmen depending on the public services the render.
Who is a Tax Ombudsman?
Tax Ombudsman is an official appointed by the government to handle complaints by taxpayers on tax matters.
Tax Ombudsman Service
Some countries in Africa including South Africa, Rwanda and Tanzania have established Tax Ombudsman Service. Tanzania established Tax Ombudsman Service in July 1, 2019 following the passage of Finance Act.
To establish the Tax Ombudsman Service or Office of the Tax Ombudsman in Nigeria, the Tax Admiration Act has to be amended or enactment of Tax Ombudsman Service Act by the National Assembly. It’s therefore important for the Presidential Committee on Fiscal Policy and Tax Reforms to include this in their recommendations. And the President should forward any executive bill to the National Assembly for an amendment of the Tax Admiration Act or enactment of a separate law for the establishment of tax ombudsman service.
Fortunately, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele had acknowledged the need for the federal government to establish a tax ombudsman to defend the poor and vulnerable against harassment by revenue collecting agencies and organisations nationwide.
While speaking on Channels TV, Oyedele noted that while the rich and powerful could hire the best lawyers and consultants to defend them against unlawful taxes, the poor do not enjoy such privileges.
He admitted that many struggling Nigerians were being over-taxed, even from illegal associations, especially in the states and local councils.
“Those are the people, for us, where we need urgent intervention because they are struggling. Survival is difficult on a day-to-day basis. And therefore, what they should expect from us is that the burden they will carry from now will reduce significantly.
“One of the reasons this is a priority for us is that when you go to a large company and you tell them they are owing N10 million in taxes, chances are that they have an accountant who can defend them or a lawyer or a consulting firm to defend them.
“But when you go to that man or woman who is struggling to survive, he has not even seen a copy of the tax laws before. He has no idea what to do.
“So, part of what my committee plans to do is that when we are done, we should have a tax ombudsman that is funded by the government. And it will be national. We are looking for a structure that takes away their burden legally,” he added.
The Office of the Tax Ombudsman Service can be domiciled within the Federal Ministry of Finance, Budget and National Planning or within the office of the Attorney General of the Federation.
Functions of Tax Ombudsman Service
The mandates of the Tax Ombudsman Service should include reviewing and addressing any complaint by a taxpayer regarding service, procedure or administrative matters arising in the course of administering tax laws by the Federal Inland Revenue Service, States Internal Revenue Services, Board Chairman of FIRS, Board Chairmen of SIRS, staff of these agencies.
The Ombudsman will only handle administrative and procedural issues which means that tax decisions on technical issues will still need to be taken to the appellate such as the Appeal Court and Supreme Court, where the taxpayer is aggrieved with such decisions.
The Tax Ombudsman Service Complaint Procedure Regulations, shall provide for:
Who is qualified to lodge a complaint; the procedure of lodging the complaint; and the procedure of handling and determining complaints.
Tax Ombudsman Service should provide priority service to individuals who may not have primary knowledge of the tax laws, and may not have the financial capabilities to hire tax or legal professionals. This will help curb harassment, extortion of taxpayers by tax officers. The Tax Ombudsman Service will help determine who is qualified to pay tax according their level of income. There have been prevalent cases where those who should not be in the tax bracket are forced to pay taxes.
The Personal Income Act provides for exemptions as for who is applicable taxpayers. The Section 2 (1)(a) of PIT Acts provides that an applicable taxpayer is a personal whose income is above National Minimum Wage. This means that anyone who earns less than National Minimum Wage, which is currently N30,000 is exempted from paying Personal Income Tax. The Act also exempted residents of the Federal Capital Territory, and Nigerians living abroad but gets profits in Nigeria.
Person may lodge a complaint on matters arising from: non-compliance of procedures or maladministration by the TRA in administering tax laws; delay in release of documents or assets seized during the investigations of tax affairs; delay in responding to a complaint submitted by a taxpayer; or non-response of letters or documents sent to the FIRS or SIRS.