The Chairman and founder of Heirs Holdings, Tony Elumelu, has said that an average business concern in Nigeria pays 48 taxes. He noted that with this trend Nigeria would be unable to keep its investors and entrepreneurs if the issue of multiple taxation was not abolished.
He said this in Abuja on Thursday, 25th of April 2019 while delivering the keynote address at the 21st annual tax conference of the Chartered Institute of Taxation of Nigeria. While he called for far-reaching tax reforms and an urgent need to pass the executive tax bill, he decried the plight of the average Nigerian entrepreneur, saying that an average business was a local government authority providing his own electricity, water and waste disposal method.
According to The Cable, he said the government should make life easier for Small and Medium Enterprises by creating favourable tax policies that will support them. He called on the government to eliminate the regime of multiple taxation. He said, “Until there is a reduction in what SMEs pay as tax, elimination of multiple taxation, the abolition of minimum income tax and excess dividend tax, it will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country.”
“The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other sub-Saharan countries. In Hong Kong, it’s just three. Multiple taxation remains a significant burden for SMEs and corporates operating in the country. “With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system.”
According to the Heirs Holdings Chairman, to increase the tax to GDP ratio from its current six per cent to 16 per cent will amount to an additional $40Bn in government revenue, which is similar to the size of the Nation’s foreign reserves. He said, “Government should drive mass mobilisation of citizens – let citizens know why they need to pay taxes and give them the assurance that their tax will be properly utilised.”
“Government should employ the use of smart tax incentives to attract and incentivise local and foreign investors. “Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign tax treaties with our top 100 trading partners in the world.”
Also, the Chartered Institute of Taxation of Nigeria said there is the need for an amendment of the country’s tax laws in order to address some of the loopholes in the tax system. It said while the dynamic nature of the economy had made it imperative for the nation’s tax laws to be amended annually, it was almost eight years now since Nigeria last amended its tax laws. The last time the country’s tax laws were amended was in 2011.
The Vice- President of the Institute, Mrs Olajumoke Simplice, urged the National Assembly to pass the tax amendment bill into law without further delay. The conference which is the single largest gathering of tax practitioners in Nigeria has ‘Unlocking the potentials of taxation,’ as its theme. She expressed optimism that the new tax amendment bill when passed into law would encourage more people to pay tax.
She said, “The National Assembly is not helping in the development of the nation. Certain things should be considered as priority. Taxation is a dynamic thing. There should be amendment of the tax laws every year but the last time there was amendment of tax laws in Nigeria was in 2011. They should put their personal interests aside and approve the bill. Nigerians should be encouraged to pay tax.”