Multiple taxation makes Nigeria an undesirable ground for breeding healthy business and competitive practices. The effect of this is that, business enterprises in Nigeria struggle to compete with their counterparts abroad. These incidents weakens our economic foundations, devalues the symbol of economic strength, which is our currency – the Naira and contracts our gross domestic product
Emmanuel Ukudolo I Monday, Sept. 11, 2023
ABUJA, Nigeria – The Nigerian Communications Commission, NCC has called on all tiers of government to support the President Bola Tinubu’s quest to eradicate multiple taxation by indicating to the government where taxes have become cancerous to economic development.
Executive Commissioner Stakeholders Management, Mr. Adeleke Adewolu made the request while speaking on the subject ‘Multiple Taxation: An Impediment to Economic Development’ at a regional stakeholders workshop on multiple taxation and regulations.
He said cancerous taxes typically manifest themselves in multiple taxation which reverse growth, stifle innovation and discourage investment.
“In parabolic terms, they are the scarecrows mounted by government to disincentivize development”, he said, nothing that the National Tax Policy 2017 emphasizes the need to eradicate multiple taxation at all tiers of government. Specifically, the Policy states that taxes similar to those being collected by a level of Government should not be introduced by the same or another level of Government. The Federal, State and Local Governments shall ensure collaboration in harmonizing and eliminating multiple taxation”, Adewolu said.
He noted that President Bola Ahmed Tinubu, in his commitment to address the vexed issue of multiple taxation, recently signed a number of Executive Orders to curb arbitrary taxes in the country and that the inauguration of the Committee on Fiscal Policy, Tax Reforms by the President, which is geared towards harmonizing taxes will provide an avenue to further engage various stakeholders in order to identify their pain points and critical concerns bothering tax and fiscal policies to facilitate a conducive environment for conducive for local and foreign investment into the country.
He explained that the paradox of multiple taxation is that it does not lead to an increment in government revenue, but that the crippling effect of these taxes makes otherwise profitable businesses, unprofitable and negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion and complicate tax compliance.
In addition to these challenges, Adewolu noted that the economic burden of multiple taxation is further exacerbated by the administrative burden of complying with these taxes.
“It further makes Nigeria an undesirable ground for breeding healthy business and competitive practices. The effect of this is that, business enterprises in Nigeria struggle to compete with their counterparts abroad. These incidents weakens our economic foundations, devalues the symbol of economic strength, which is our currency – the Naira and contracts our gross domestic product”, he warned.
He said the workshop is therefore intended to rethink approach towards taxation by adhering to its founding principles, which include
Neutrality: Taxation should seek to be neutral and equitable between forms of business activities. A neutral tax will contribute to efficiency by ensuring that optimal allocation of the means of production is achieved.
Efficiency: Compliance costs to business and administration costs for governments should be minimised as far as possible.
Certainty and simplicity: Tax rules should be clear and simple to understand, so that taxpayers know where they stand. A simple tax system makes it easier for individuals and businesses to understand their obligations and entitlements. As a result, businesses are more likely to make optimal decisions and respond to intended policy choices.
Effectiveness and fairness: Taxation should produce the right amount of tax at the right time, while avoiding both double taxation and unintentional non-taxation. In addition, the potential for evasion and avoidance should be minimised.
Flexibility: Taxation systems should be flexible and dynamic enough to ensure they keep pace with technological and commercial developments. It is important that a tax system is dynamic and flexible enough to meet the current revenue needs of governments while adapting to changing needs on an ongoing basis.
