Businesses in the country are groaning under multiple taxation as it affected the operations of many companies negatively.
One factor which has continually impacted negatively on the efficiency of the Nigerian tax system is the issue of multiplicity and duplication of taxes. The investment climate in Nigeria is continually overwhelmed with multiple regulations from different regulatory agencies and excessive drive for revenue by government agencies.
Dearth of trade facilitation infrastructure, poor access to the nation’s sea ports and longer turnaround time for clearance of cargoes collectively stifle the smooth operations of businesses; inadequate electricity supply and incessant increases in tariff without commensurate improvement in generation, transmission and distribution also remain key challenges.
Stakeholders have proffered that government needs to evolve economic agenda that would boost the investment climate of the country. They urged government at all levels to harmonise their tax policies towards reducing the tax burden imposed on various categories of businesses in Nigeria, in other to promote business growth and job creation.
On multiple taxation, the managing director/chief executive officer of Financial Derivatives Company, Bismarck Rewane said, “We must be more efficient in the collection of taxes but also reduce the number of taxes. The burden of tax is a problem. The lower the tax rate, the more complaint people are going to be.”
He added that “therefore we should go more on efficiency of tax with more credibility in leadership and policies. If we are honest to the people, people will be more willing to pay taxes than if we are dishonest.”
Speaking to NATIONAL ECONOMY, the managing director of Lancelot Ventures Limited, Mr Adebayo Adeleke, said multiple taxation has been hindering steady growth of businesses.
Adeleke implored government to encourage business growth through their policies including moderate taxation, and also improve on other enabling infrastructure like improved and regular electricity supply and good road network to facilitate industrial growth and development, leading to more job creation for our teaming masses.
Director-general of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, stated that Nigeria’s path to economic growth, industrialisation and sustainable development has been compromised by inadequate attention to the numerous pressing challenges of the manufacturers who are meant to be the propellers of its long-term economic agenda.
According to him, achieving a stable rapidly-growing economy would require taking head-on the daily bottlenecks confronted by business owners within the manufacturing sector, considering its active inter-linkages with other key sectoral drivers of the economy.
“Amidst the numerous challenges, multiple taxation, forex scarcity, exorbitant interest rate, high-cost business operating environment, smuggling, insecurity, energy crisis and epileptic power supply are leading the pack.
“In order to restore the sector to an enviable position in the global business environment and in turn propel an inclusive growth of Nigerian economy, MAN hopes that the government will committed to facilitate the formal service sector to widen tax net and avoid multiple imposition of tax on the manufacturing companies; tackle insecurity and smuggling by upscaling capacity building and providing adequate security equipment and technology for surveillance and intelligence gathering; continue to involve all stakeholders to play a vital role in supporting security along the oil infrastructure while also ensuring they are beneficiaries of the awarded surveillance contract; among others.
Chief executive officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, stated that Nigerian manufacturing companies and indeed most investors, are going through tremendous stress at the momen.
“They are currently grappling with serious macro-economic challenges and structural constraints impacting capacity utilisation, productivity and competitiveness,” he noted, adding that it is affecting sales, turnover, profitability, shareholder value and the sustainability of investments.
“Manufacturers, across all product segments, need a respite, especially in the light of the unprecedented escalation of production and operating costs,”he added.
Yusuf agreed that multiple taxes were over-burdening the private sector. This, he said, is in addition to the burden of dealing with multiple tax agencies from FIRS to states IRS, and Customs, among others, all trying to collect revenue and conduct tax audits. He said the private sector has increasingly become the target for regulatory agencies seeking to raise revenue for government deficit, which continue to take a toll on the private sector competitiveness.
“Governance issues need to be addressed, as many agencies hardly make full remittance to the government coffers. The private sector has become a target for regulatory agencies, despite not adding any value to the sector.
“Constant imposition of levies and approval of licences are taking a toll on the private sector. There should be a distinction between regulatory agencies and revenue generating agencies,” he submitted.
President of the Lagos Chamber of Commerce and Industry (LCCI), Dr Michael Olawale-Cole advised the federal government to focus its attention on other areas to raise funds rather than over-burdening the private sector with additional taxes.
“Of course, tax is a must for everyone, but we should not put too much pressure on the private sector in the area of raising revenue. We are appealing that the federal government should expand the tax net as against putting pressure on the very compliant taxpayers,” he noted.
Multiple taxes particularly affect the oil and gas industry, the manufacturing and service sector, the telecommunications industry, the insurance industry as well as the micro, small and medium enterprises (MSMEs).
