To address the persistent challenges posed by multiple taxation and create a tax-friendly business climate in Nigeria, the Joint Tax Board (JTB) convened its 133rd meeting in Abuja.
The gathering aimed to streamline and codify tax regulations at both the national and sub-national levels, envisioning a landscape that promotes economic growth while easing the tax burden on businesses.
The meeting witnessed the convergence of key figures driving tax reform and policy in Nigeria.
Notable attendees included: Chairman of the JTB and executive chairman of the Federal Inland Revenue Service(FIRS), Mr. Muhammad Nami; chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele; and representatives from the Internal Revenue Services of all 36 states and the Federal Capital Territory(FCT).
Also, the Manufacturers Association of Nigeria (MAN) has sounded the alarm about the detrimental impacts of multiple taxations on businesses across the country.
The current scenario finds many enterprises grappling with a plethora of demands from various tiers of government, including taxes, levies, fees, and permits.
This tangled web of financial obligations is compounded by an array of regulations and the unrelenting pursuit of revenue generation by government entities.
Commenting on the development, Taiwo Oyedele emphasised the imperative of a robust fiscal policy and a tax-friendly environment for Nigeria’s economic development.
He highlighted that the country lags far behind on the global ease of paying taxes index, a crucial factor for attracting investments and nurturing businesses.
The tax-to-Gross Domestic Product (GDP) ratio in Nigeria, currently standing at 10.8 percent, falls significantly below the African average and ranks as one of the lowest worldwide.
This financial gap has led to an overreliance on borrowing to sustain public spending, resulting in a cycle of insufficient funding for crucial socio-economic endeavors.
Oyedele pin-pointed key challenges inherent to Nigeria’s tax system, which include; the complex web of taxes and revenue collection agencies, a fragmented tax structure that exposes businesses to risk, low tax morale and high instances of tax evasion, and the substantial cost associated with revenue administration and compliance.
Additionally, he listed inadequate policy coordination across government tiers and lack of accountability for taxpayer funds compound these issues as challenges.
Oyedele illuminated the far-reaching consequences of multiple taxation, adding that, this phenomenon contributes to low tax morale, discourages investment, erodes business capital, fosters corruption, and amplifies the complexities of conducting business, even as it undermines returns on investment, jeopardises business stability, and can even trigger business collapse.
To counter the challenges posed by multiple taxation, Oyedele urged the JTB to pursue a comprehensive approach. This includes clarifying taxing rights, integrating tax collection functions, harmonizing revenue administration, and simplifying tax compliance processes.
The goal, he stressed, is to reduce the number of taxes, enhance revenue generation, and create a conducive environment for investment and growth.
In his address, Mr. Nami stressed the importance of aligning revenue administration to eliminate the specter of multiple taxation, while underscoring the desire to optimise revenue streams to fuel infrastructure development and enhance the delivery of vital social services to the Nigerian populace.
As the Joint Tax Board continues to strategise and collaborate, it endeavors to lay the foundation for a more streamlined, equitable, and business-friendly tax regime that will catalyse Nigeria’s economic progress and foster entrepreneurial resilience
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