Multiple Taxation Killing Economy – Okonjo-Iweala BY ONYEKA-AJUMOBI ONOCHIE, Abuja The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, yesterday, concurred that multiple taxation and levies by various tiers of government have the potential of spelling doom for the economy, contrary to government’s ceaseless campaigns for internally generated revenues. She agreed that this is particularly harmful as it increases the cost of doing business in Nigeria and discourages local trade and investment and as well as giving negative perception of the Nigerian business environment to foreign investors. She said, “According to the Manufacturers Association of Nigeria (MAN) report, some states have as many as 97 different taxes, levies and charges that are imposed on businesses. This is simply not economically viable, even as the costs to the government of administering these various taxes and the costs to business of paying these taxes outweigh their benefits to both the private businesses and the government. “A recent World Bank report also shows that for every N100 that businesses have to pay in taxes, they pay about N35 in compliance costs. This is a waste of capital that could be reinvested in these businesses to grow them and create more jobs for our economy,” she lamented. The minister, who stated this at the inaugural meeting of the ministerial implementation committee of the National Economic Council (NEC) resolutions on the harmonization of taxes and levies across the Federation, in Abuja, noted that, by streamlining and harmonizing taxes across the federation, the country would have been in a position to increase its productive potentials. Also speaking on the multiplicity of taxes on the transportation of goods, she said this, particularly, impairs the integration of internal markets and the establishment of a fully integrated economic space within the country, adding that, by impairing the integration of the national market, the mobile levies also reduce competition between companies located in different states of the country. “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 stressed. It would be recalled that the National Economic Council (NEC) had, in March, this year, constituted an adhoc committee to review the presentation made by the Manufacturers Association of Nigeria (MAN) to it on multiple taxation and other challenges facing businesses in Nigeria. The key requests and recommendations then made by MAN include review and amend the various taxes and levies on its members, stoppage of the use of unorthodox means to collect taxes and levies, immediate automation of tax operations by relevant tax authorities to eliminate leakages and ensure ease of collection, and publishing of the approved list of taxes and levies within the states and local governments to educate the public and facilitate compliance. The minister continued, “But 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.” In addition to creating hiccups in local business transactions, the minister also underscored the danger in multiple taxation, relative to breaking international business barriers. She said, “If Nigeria will continue attracting foreign investment, diversify our economy and create more jobs, and become one of the top 20 economies of the world by 2020, we must get our tax system right. “Reducing the total number of taxes paid, increasing transparency as to how and what to pay, and facilitating procedures for filing taxes, will be essential to reducing high compliance costs and, in so doing, increase Nigeria’s tax compliance rate and also the revenue. “Therefore, we have to have a transparent process that makes it easy for people to know what taxes and levies to pay and to harmonise these activities across the country, she concluded.
Posted on: Wed, 23 Oct 2013 08:04:46 +0000
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