FG Decries Multiple taxation in Nigeria

The Federal Government has decried incidences of multiple taxation in the country, saying it is harmful to the economy.

Finance  Minister, Ngozi Okonjo-Iweala who made the position of the goverrnment known at the presentation of the roadmap on the harmonisation of taxes and levies  across the federation, said multiple taxation increases the cost of doing business in Nigeria, discourages local trade and investment in addition to giving a negative perception of the Nigerian business environment to foreign investors.


A report by Manufacurers Association of Nigeria (MAN) stated that some states have as many as 10097 different taxes, levies and charges that are imposed on businesses.


The minister said it is not economically viable – 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 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. By streamlining and harmonising taxes across the federation, we would increase Nigeria’s productive potential” the minister said.


She said with the roadmap that has been developed, some actions would be implemented immediately while others that have to be changed and modernised could be done within the next six to 12 months.


“When we publish these things, manufacturers’ association and the Nigerian public will have it in their hands, so when you go somewhere they now say no you have to pay, you say no this is the approved list and I have paid with your receipt or I am willing to pay. So transparency is a quick win.


“As we all know the issue of multiple taxation is one which has been on the front burner for many years now in Nigeria.


“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,” she said.


In addition, Okonjo-Iweala said the multiplicity of taxes on the transportation of goods impairs the integration of internal markets and the establishment of a fully integrated economic space within Nigeria.


She added that by impairing the integration of the national market, the mobile levies also reduce competition between companies located in different states in Nigeria.


She said with increased competition, the nation could bring down prices for consumer goods produced by the companies and make its local companies and exports more competitive in the global market.


“The implementation of these recommendations will not only increase economic efficiency but also make enforcement simpler.


“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,” Okonjo-Iweala added.


Presenting the roadmap, Acting Executive Chairman of Federal Inland Revenue Service (FIRS), Kabir Mashi, said multiple taxation has been an issue affecting most businesses, as there are a lot of complaints about multiple taxes and levies that have slowed down the pace of business in Nigeria.

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