“Taxation is the backbone for public finance. It provides guaranteed and sustainable sources of funding for social programs and public investments, it also serves as a tool curated by the government to effectively and efficiently distribute our commonwealth. It is thus evident that taxation is critical for making growth sustainable and equitable. Thus, taxation by design is an instrument for economic development and it is important to acknowledge and support the initiative of all tiers of Government in using taxation as an instrument for socio-economic development”
By Abdulrahman Aliagan, Abuja
The Executive Vice Chairman of the Nigerian Communication Commission (NCC), Prof Umar Dambatta has called on Nigerian government to put an end to the issue of multiple taxation, if the country should maintained accelerated growth and development in her economic drive, noting that multiple taxation has continuously imposed same taxes on the same income base, transaction or person by one or more levels of government, in one or more jurisdictions.
The EVC NCC made this known at the Regional Stakeholders Workshop on Multiple Taxation and Regulations organised by the Commission in Ibadan the state capital of the Oyo state with the theme, Multiple Taxation: An Impediment to Economic Development. The workshop that brought together senior government functionaries from all the states in the South West Geo-political Zone in order to build better understanding on how cancerous and harmful the issue of multiple taxations and regulations being imposed on the telecom companies by the states and their agencies and agents can be to the country’s development.
In his keynote address, the Executive Vice Chairman of the NCC, Prof Umar Dambatta, who was represented by the Executive Commissioner Stakeholders Management, Mr Adeleke Adewolu, noted that the issues of multiple taxation and regulations have been a recurring theme in the Nigerian economic discourse, added that it is a major impediment to economic development in Nigeria.
He stated that, “Despite the prospect of accelerated economic growth, the presence of multiple taxation, which the World Bank has termed ‘nuisance taxes’ had and continued to prove to be a bane on economic development in the Country.”
Adewolu pointed out that, it is important to emphasize that taxation, in and of itself, is a veritable tool for economic development.
“Taxation is the backbone for public finance. It provides guaranteed and sustainable sources of funding for social programs and public investments, it also serves as a tool curated by the government to effectively and efficiently distribute our commonwealth. It is thus evident that taxation is critical for making growth sustainable and equitable. Thus, taxation by design is an instrument for economic development and it is important to acknowledge and support the initiative of all tiers of Government in using taxation as an instrument for socio-economic development.” he said.
Adewolu further stated that, “supporting the tax initiatives by the various tiers of Government includes indicating where a category of taxes have become cancerous to economic development. These types of taxes typically manifest themselves in the form of multiple taxation and by design; they reverse growth, stifle innovation and discourage investment. In parabolic terms, they are the scarecrows mounted by government to disincentivize development.
According to the Executive Commissioner Stakeholders Management, “It is pertinent to note 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.
“Also, the President and Commander-in-Chief of the Federal Republic of Nigeria, His Excellency, 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. Also, 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. This would also facilitate a conducive environment for conducive for local and foreign investment into the country.”
Adewolu noted that the paradox of multiple taxation does not lead to an increment in government revenue, rather the crippling effect of these taxes, is that it makes otherwise profitable businesses, unprofitable. It negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion and complicates tax compliance.
“According to the World Bank, taxing a specific tax base will lead to increasing revenues up to a specific point, after which the overall tax revenue will decline because companies go out of business, or evasion increases significantly.”
He also highlighted the efforts of the NCC in addressing the issue, including the implementation of the Common National Numbering Plan (NNP), which has helped to streamline the taxation and regulation of the telecoms sector.
The Executive Commissioner further called on all stakeholders to work together to find a lasting solution to the problem of multiple taxation and regulations in Nigeria.
According to him, “The curious question, which this workshop will attempt to answer, is how a fiscal tool for economic development like taxation can become inimical to economic development. It is imperative therefore to correct some misconception about taxation, particularly the misguided notion of taxation as a penal tool on thriving business enterprise.
The Regional Stakeholders Workshop on Multiple Taxation and Regulations has provided a platform for stakeholders to discuss the issue of multiple taxation and regulations in Nigeria. The workshop has highlighted the negative impact of multiple taxation and regulations on businesses and the economy as a whole.
It has also provided recommendations for a more coordinated approach to addressing the issue, including the establishment of a national tax policy, leveraging technology to simplify the taxation process, and increased transparency and accountability in the collection and use of taxes and levies.
It is hoped that the recommendations made at the workshop will be taken into consideration by the Nigerian government in addressing the issue of multiple taxation and regulations, and that it will lead to a more conducive environment for businesses to thrive.
