Latest News | News Break Nigeria Despite increasing concern about media coverage of taxes some companies pay or the seemingly low effective tax rates, survey has shown that more companies agree or strongly agree that tax risk and tax controversy will become more important for them in the next two years. This was the view of 81 percent of all companies surveyed in the 2014 tax risk and controversy survey conducted by E&Y. “Our survey indicated more aggressive, focused tax enforcement and a sense that mutually constructive relationships between taxpayers and authorities may be becoming strained,” E&Y said in the report. According to the survey, 69 percent felt that tax audits had become more aggressive and frequent in the last two years. In addition, 74 percent felt that tax administrators are now challenging existing structures due to changes in the law or changes in their enforcement approach. Also, 75 percent cited insufficient resources to cover tax function activities as their leading source of operational risk. Our survey results illustrate just how rapidly reputation risk has become a key concern. Overall, there was a 72 percent increase in the number of companies, according to the report, saying they are somewhat or significantly concerned about media coverage of taxes. “Being compliant with the law isn’t always good enough if a journalist writes about your taxes. There is a far higher threshold for public approval of a tax position than there is when you are dealing with a tax auditor,” the report quoted a vice president of tax of a company heavily involved in digital commerce. Though, the survey of 830 tax and finance executives in 25 jurisdictions indicates that the tensions described in similar previous reports softened compared with the tax risks that companies are experiencing and anticipating. “The divide between current and future tax risk management models will not be easy to bridge. Enterprises will need to flawlessly execute a well thought-out, well-resourced strategy, and at the same time remain flexible enough to deal with today’s changing weather conditions,” the report stated. In recognition that double taxation is one potential outcome of uncoordinated or unilateral actions, when asked to what extent they foresee more double taxation for their company in the coming three years, 61 percent of the largest companies in the survey expressing an opinion, agreed or strongly agreed, while only 7 percent disagreed or strongly disagreed. Iheanyi Nwachukwu
Posted on: Wed, 30 Jul 2014 00:42:46 +0000
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