Nigeria Multiple Taxes: Over Regulation Affecting Business Growth

Nigeria Multiple Taxes Over Regulation Affecting Business Growth
Nigeria Multiple Taxes Over Regulation Affecting Business Growth
  • Private sector operators lament over the federal government’s implementation of multiple taxation and over-regulation.

Nigeria multiple taxes have attracted the attention of the Private Sector Operators as they protest the federal government’s implementation of multiple taxations across sectors. In expressing their discontent with this act, the operators pointed out the negative impact it will and already have on business growth and survival.

While speaking recently at the Lagos Chamber of Commerce and Industry (LCCI)’s Economic and Business Outlook 2022 Seminar, Africa’s Tax and Legal Service Leader, PwC Nigeria, Taiwo Oloyede mentioned that a large part of the government’s tax revenue is with tax evaders in Ministries Departments and Agencies (MDAs).

Oloyede explained that the highest tax evaders are mostly members of MDAs who collect Value Added Tax(VAT) and withhold them instead of remitting them to the government. He mentioned that most of them do this because they know they get away with it.

He further stated that the Federal government can increase tax revenues without necessarily increasing the existing taxes or introducing new ones.

Regarding the issue of fuel subsidy, Taiwo pointed out that the government has always been sketchy regarding the true cost of fuel subsidy. He projected that the government will spend beyond the proposed ₦4 trillion.

Previously, the Director General, Budget Office of the Federation, Ben Akabueze blamed the country’s inability to meet the Organisation of Petroleum Exporting Countries (OPEC’s) quota on significant crude oil theft and vandalization of crude oil facilities.

According to the President of LCCI, Michael Olawale-Cole, factors such as CBN’s hike rate as well as rate hikes by other banks around the world will impact growth in the third quarter.

He pointed out that rising energy costs with diesel above ₦800/litre, Jet-A1 at ₦710 per litre, and PMS being sold above the government-fixed price of ₦165 per litre, will perpetually heighten production costs which may lead to limited manufacturing and eventual job losses.

He stated that the high rate of insecurity in many parts of Nigeria will consistently threaten agricultural production, manufacturing value chains, and logistics.

Michael noted that the LCCI had previously projected a growth rate of 2.5 percent for the economy, mentioning that the projection was based on the supposition of sustained high oil prices, transition to a market-reflective exchange rate system, targeted fiscal interventions, and gradual implementation of reforms in the oil sector.This post is sponsored by our partners Wigs

Nami says FIRS now has a firm grip over multiple taxation

Nigeria Multiple Taxes: Matters Arising on in a recent Economic Outlook organized by Nairametrics gathered from the Africa Tax and Legal Service Leader, PwC Nigeria, Taiwo Oloyede that the current spate of multiple taxations in Nigeria is likened to the Nigerian government taxing poverty.

The tax expert further reiterated that rather than tax the daylight out of existing businesses, the government must explore an all-encompassing economic growth capable of reducing the economic burden on SMEs, and as a result of business growth,  increase the tax net.

With the above approach, it is expected that the tax administration must have succeeded in capturing non-paying upper middle-class institutions, especially the MDAs into the tax net.

Nigeria Multiple Taxes: What the FIRS is Saying

Recall that in February 2022, Nigeria’s regulatory agency; The Federal Inland Revenue Services, FIRS assured that through the amendment ensured by Section 68 of FIRS Establishment Act by the Finance Act 2021, the issue of multiple taxations in Nigeria has been tackled.

The federal agency through its boss, Muhammad Nami had assured that the amended tax provisions allow for a streamlined tax administration regime going forward, ensuring equity and ease.

Speaking further on the ease created by the new amendment, Section 10 of the VAT Act now provides for a mechanism for applying VAT on goods or services streamed into Nigeria by non-resident companies, especially to consumers (B2Cs), affording the same tax treatment to both local and foreign supplies.

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