Jan. 14, 2016

Seyi Bickersteth


Seyi Bickersteth

National Senior Partner , KPMG Professional Services,

TBY talks to Seyi Bickersteth, National Senior Partner of KPMG Professional Services, Nigeria, on the changing tax regime, transparency, and staying ahead.

Taxation has become an increasingly important issue in Nigeria and will likely be collected more aggressively in 2016. What is your advice to firms on Nigeria's new tax enforcement?

Governments and tax authorities around the world (including Nigeria) are beginning to pay greater attention to how organizations manage their tax affairs and are demanding greater transparency in tax compliance processes. In fact, different directives, regulations, and action points that all require greater disclosures and reporting of related-party transactions, with the aim of reducing perceived base erosion and profit shifting (BEPS), are being agreed upon at global scale. In view of the above, firms need to realize that the management of their Nigerian tax affairs can no longer be business as usual. They need to know that tax authorities will be more aggressive and sophisticated in 2016. Consequently, taxpayers need to make conscious and strategic efforts toward increased tax compliance and management. In short, they need to make taxes a boardroom agenda. This will ensure that they assess their tax risks and processes, just like other risks facing their business, develop effective tax strategies that align with and support their overall business objectives, and determine whether their tax departments (and tax consultants) are fit-for-purpose. Going forward, we should expect tax authorities to impose more sanctions on tax defaulters. Thus, taxpayers need to ensure that their tax departments and consultants file tax returns, pay taxes due, and respond to letters and assessment notices from tax authorities on time. Otherwise, they would be exposed to avoidable tax liabilities and reputational risk. Firms also need to know that tax authorities will 'go for the kill' during tax and transfer pricing audits in 2016 and in future years, in a bid to shore up tax collection. Thus, the need for taxpayers to keep proper records, and use competent tax consultants especially during tax audit exercises, cannot be overemphasized. Lastly, firms need to be proactive in managing their tax affairs. They need to proactively review their structures in view of the imminent implementation of the BEPS action points being spearheaded by the Organization for Economic Cooperation and Development (OECD). They need to evaluate, for example, what the proposed implementation of the destination principle for value-added tax collection on e-commerce transactions would mean for their business. Someone needs to be asking: “Are we ready for the introduction of thin capitalization rules in Nigeria?" “How would the introduction of controlled foreign company rules or anti-fragmentation rules affect our current ownership and operating structures?"

How is KPMG contributing to transparency at all levels of the economy, and how would you advise firms to be more transparent in their operations?

KPMG in Nigeria ensures that it remains transparent in all its dealings with clients—both public and private. We have strong business principles and we believe that organizations must do things ethically and transparently. We are an ethics-driven firm and believe that it is the key to being transparent. The way we work and the type of clients we work for attest to our strong principles of being transparent. We have a client acceptance procedure that makes us choose our clients carefully, following due process. We are an organization that complies with requirements of regulations, acts, and policies that govern our business. KPMG in Nigeria contributes to transparency at all levels of the economy from our financial audit statements, which increase stakeholders' confidence in the businesses that we audit. Recently, Kunle Elebute, Partner and Head, Advisory Services, KPMG in Nigeria was appointed member of the Steering Committee of the Efficiency Unit for the Ministry of Finance, to ensure effective management of Nigeria's economy in order to reduce cost of governance. This is testimony to the fact that we have a proven track record of integrity and transparency.