Multiple Taxation Hampers Nigeria’s Productive Potential – Okonjo-Iweala The streamlining and harmonising taxes and levies across the federation needs to be given urgent attention if Nigeria must realise her full productive potential and increase revenue collection, in view of the declining revenue witnesses in recent times. Coordinating Minister of the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, who made this assertion yesterday, said government currently spends so much resources administering the collection of these taxes and levies, thus making what goes into government’s coffers at the end of the day far less than actual collection. Speaking in Abuja during the inaugural meeting of the Ministerial Implementation Committee (MIC) on the National Economic Council’s Resolutions on the Harmonisation of Taxes and Levies across the Federation, Okonjo-Iweala noted that the costs expended by government to administer these various taxes and levies far outweigh their benefits to both the private businesses and the government. The minister, who cited a recent World Bank report, noted that at least N35 was paid as compliance cost for every N100 tax and revenues collected by the government. “This is a waste of capital that could be reinvested in these businesses to grow them and create more jobs for our economy. By streamlining and harmonising taxes across the federation, we would increase Nigeria’s productive potential,” she said. According to her, the issue of multiple taxation was one which has been on the front burner for many years now in Nigeria and despite several attempts by the government to tackle this issue, it has remained unabated - affecting both big and small businesses and the movement of goods and services in the country. “This is particularly harmful to the economy because multiple taxation increases the cost of doing business in Nigeria, discourages local trade and investment and also gives a negative perception of the Nigerian business environment to foreign investors,” she said. According to her, the multiplicity of taxes on the transportation of goods also impairs the integration of internal markets and the establishment of a fully integrated economic space within Nigeria. “By impairing the integration of the national market, these mobile levies also reduce competition between companies located in different States in Nigeria. With increased competition, we could bring down prices for consumer goods produced by these companies and make our local companies and exports more competitive in the global market,” she added. Recall that the National Economic Council (NEC) had constituted an adhoc committee to review the presentation made by the Manufacturers Association of Nigeria (MAN) to NEC on multiple taxation and other challenges facing businesses in Nigeria. The key requests and recommendations made by MAN to Council include: Review and amend the taxes and levies, stop the use of unorthodox means to collect taxes and levies, automate tax operations by relevant tax authorities to eliminate leakages and ensure ease of collection, and publish the approved list of taxes and levies within the States and local governments to educate the public and facilitate compliance. culled from Leadership Newspaper
Posted on: Thu, 24 Oct 2013 19:35:48 +0000
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