Tobi Aminu – Page 8 – Sunmola David & CO

Grants and loans are NOT reliable revenue sources — taxes are

Babatunde Fowler, chairman of the Federal Inland Revenue Service (FIRS), says taxation is the country’s lifeline for economic development. Fowler made this known on Tuesday night in Abuja at the investiture of Kudirat Abdul-Hamid as the third national chairperson of Society of Women in Taxation (SWIT). Fowler was represented by Abiodun Aina, an official of the FIRS. He said aids, grants and loans were not reliable revenue sources to ensure the development of any economy. Charging SWIT under Abdul-Hamid’s leadership to continue to educate Nigerians on why they should pay tax for economic and national development, the FIRS while the service will continue to work to reduce the burden of taxation. Although Fowler noted that Nigerians were not convinced that their taxes were being judiciously used, he said the federal government has been more prudent in utilization of generated revenue from taxation. According to Fowler, revenue generated from taxation is currently being utilised by the government to improve the country’s infrastructure, electricity as well as create employment. In her remarks, Abdul-Hamid assured that she would not let Nigerians and members of SWIT down. “We shall ensure global best practices, value creation and addition; we hope to bring more women on board, including those operating in isolation,” she said. “We will remain resolute in not just talking taxation, but working to ensure that Nigerians pay their taxes.” NAN reports that Abdul-Hamid is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and Chartered Institute of Taxation (CIT) and a member of Nigerian Institute of Management, is presently the auditor-general for federal capital territory (FCT) area councils. Source: The Cable

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Don’t evade tax, Cross River warns low income earners

Tax news / Tobi Aminu

Residents of Cross River State, particularly low income earners, have been warned not to evade paying their taxes. The Speaker of the state House of Assembly, Eteng Williams, gave the warning in Calabar during a tax enlightenment town hall meeting organised by the Cross River State Internal Revenue Service as part of its sensitisation and enlightenment of tax payers on voluntary tax compliance. Williams said for any low income earner to be exempted from the tax net, the executive arm of government would forward a list of those who qualified for exemption to the Assembly and then pay for them as the law did not allow tax exemption. “What the law actually says is that at the beginning of a tax year, which is before the appropriation is passed, we have to write to His Excellency to give us (the Assembly) the list of those to be exempted. “Tax is compulsory, which means the government must pay for those people. If the government does not pay, then they have not been exempted. You cannot exempt yourself from tax because it is against the constitution of the Federal Republic of Nigeria,” he said. “If the Cross River State Government is willing to pay for them, then they will be exempted, particularly the low income earners. When government categorises those who are low income earners and then gives us the list of these people, then they will be exempted and we will collect the money from government. “Everybody must pay their taxes. If you are being exempted, you have to tell the government to pay for you because when someone asks you to present your tax clearance certificate and you don’t, then it’s against the constitution. Any law that is in conflict with the constitution is null and void.” Source: Punch

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NCWS wants CAC to create gender desk

CAC SERVICES / Tobi Aminu

The National Council for Women Societies (NCWS) has appealed to the Corporate Affairs Commission (CAC) to create a gender desk that will collate information specifically targeted at women’s empowerment. National president of the council, Mrs Gloria Shoda, made the appeal when members of the council visited the acting Registrar of CAC, Ms Azuka Azinge in Abuja, Wednesday. She said the desk will assist in raising awareness and educate women on the benefits of formalising their small businesses and all opportunities available in registering such ventures with CAC. She said “a gender desk in CAC will help to collate information, specifically targeted at women’s empowerment. Research shows that women outnumber men in business start-ups. “However, there are structural obstacles which women face in the society in general, such as gender discrimination in access to opportunities for expansion, skill-acquisition, training and credit facilities.” Shoda added that the NCWS had the capacity to reach out and educate women, especially in rural areas on what CAC had to offer in terms of business and enterprise environment that would be beneficial to the women. She stressed the need for unemployed persons, especially women, to venture into business enterprises, as well as register with CAC to enable them to have access to loans, grants and other benefits that would aid their businesses. “Therefore, the growth and expansion of the Small and Medium-scale Enterprises (SMEs) sector, as well as the importance of registering a business name cannot be over-emphasised for the womenfolk. “The benefits are immense, including having access to grants, credit facilities and benefitting from government-backed schemes, exhibitions and training initiatives. The council president commended CAC for reducing the fees for business name registration by 50 per cent for a period of two months and appealed to the commission to extend the grace period to enable women, especially in rural areas, to benefit from it. Acting Registrar of CAC, Azinge assured NCWS that the agency would continue to support and encourage the growth of businesses and provide enabling environment for them to thrive. Azinge also assured that the commission would look into the issue of extending business name registration to enable women, especially in rural areas to benefit from the cost reduction of business names registration. Source: Blueprint

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Better to Boost Revenue By Raising VAT than Borrowing

Tax news / Tobi Aminu

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele yesterday justified the proposed move by the federal government to increase the value added tax (VAT), which is currently at 5 per cent to 7.5 per cent. He said the government was apparently left with no other option than to raise taxes to meet its obligations- amidst criticisms over the country’s rising debt profile as well as the burden to service such debts. The CBN governor also assured Nigerians that the planned nationwide implementation of the cash policy scheduled for March 2020 would be of immense benefits to the people and the country in general. Addressing journalists at the end of the two-day meeting of the Monetary Policy Committee (MPC), Emefiele said government’s current drive to increase VAT had the potential to improve fiscal revenue to support expenditure and reduce the budget deficit as well as government borrowing, when implemented. Notwithstanding public outcry over the proposed increase, the MPC noted that the rate of VAT increase “was too little to close the gap in government finances.” Accordingly, the MPC urged the government to, as a matter of urgency, adopt what it termed a ‘Big Bang’ approach towards building fiscal buffers by purposefully freeing-up redundant public assets through an efficient, effective and transparent privatisation process. This, according to the committee, would raise significant revenue for government and resuscitate the redundant assets to generate employment and contribute effectively to national economic growth. The MPC further noted the unstable oil prices, its implications on accretion to external reserves and its persistent call on the government to build fiscal buffers. Consequently, the Committee urged the National Assembly to exercise restraint from increasing the oil price budget benchmark to avoid budgetary overruns at the implementation stage of the budget. It noted that projections from the oil futures market indicate that oil prices will remain tight around the budget oil price benchmark in the medium term. The apex bank, however, resolved to retain the Monetary Policy Rate (MPR) otherwise known as interest rate at 13.5 per cent. The MPR is the rate at which the CBN lends to the real sector and often determines the cost of borrowing in the economy. It further retained the asymmetric corridor at +200/-500 basis points around the MPR while the Cash Reserve Requirements (CRR) and Liquidity Ratio remained at 22.5 per cent and 30 per cent respectively. Emefiele said the Committee decided by a unanimous vote to hold the MPR and all other policy parameters constant. According to him, “In its considerations regarding the policy options to adopt, the MPC as usual, felt compelled to review the options of whether to tighten, hold or loosen. “The Committee noted the positive moderation in inflation, though slowly from 11.08 per cent in July to 11.02 per cent in August 2019. Given that this was still above the target range of 6-9 per cent, and considering the pressure on reserve accretion caused by the relatively weak crude oil price, the MPC felt the imperative to tighten.” He added: “On the contrary, the MPC was of the view that doing so in the midst of a fragile growth outlook, would increase the cost of credit, and further contract investment and constrain output growth. “On loosening, the Committee felt that this would result in increased system liquidity and hence, heighten inflationary tendencies in the economy. In particular, the MPC was of the view that loosening would drive growth in consumer credit but without a corresponding adjustment in real sector output. “The Committee was also convinced that increased liquidity and interest rate moderation would result in exchange rate pressures as money supply rises. “As regards the option to hold, the MPC opined that the option requires a clear understanding of the quantum and timing of liquidity injections into the economy, before deciding on possible adjustments to the stance of monetary policy. “The Committee was also of the opinion that retaining the current position of policy offers pathways to appraising the effects of the suit of heterodox monetary policy to encourage credit delivery to the real sector, especially in the light of the subsisting implementation of the Loan-to-Deposit Ratio policy.” On the proposed VAT hike, the CBN governor said: “My response here is that the government has a responsibility to fend for everybody. In fending for everybody means it has to spend money to provide infrastructure, roads, airport and different things that will improve the lives of our people. “But there are two ways through which the government can fund this expenditure: It is either it raises revenue or it goes for debt. You all know that the government has been criticised that the debt stock is too high. You all know that government has been criticised that its debt service ratios are too high.” He further added: “When you say the debt service ratio is too high, it means that your interest rate is too high to revenue and what that also means is that your revenue is small because if your revenue is large, then your debt service ratio should be lower. “Government unfortunately will not have any options if we say government should not borrow- then government must raise revenue. If government must raise revenue and we think that this should be one way through which the government can raise revenue to meet its obligations, I think it calls to a rationale that what we are saying is that it is the right decision to say that government has to increase VAT from 5 per cent to 7.5 per cent.” He further clarified: “Yes, we agree that this may be painful but it is important that we understand that government also has an obligation that it must meet and so it must raise revenue. “And what is this VAT rate? 7.5 per cent: compare the VAT rate in Nigeria to VAT rate in any part of the world. Nigeria’s VAT rate even at 7.5 per cent stands at one-off if not

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Vat: Why It Will Hurt

TAX SERVICES / Tobi Aminu

The federal government recently increased the value added tax (VAT) from 5% to 7.5%.The increase has continued to generate mixed reactions. The organised labour and some economic experts have condemned the move in strong terms and described the increase as untimely, aimed at inflicting more pains on poverty-ravaged Nigerians. The NLC stated that the increase in VAT while government is still negotiating the minimum wage will not augur well for workers. The VAT will end up eating up the much-talked about minimum wage and erode the expected gains that might arise from the implementation. If the VAT is adjusted and assented to by the National Assembly, Nigerians next year are going to pay more for the goods and services they will consume. The Nigerian rent-seeking economy has continued to nosedive due to the uncertainty or volatile nature of the global oil market. The market price of crude oil which constitutes 90 per cent of the country’s revenue has continued to swing up and down, thus affecting the implementation of our budget. This is the main reason why government is exploring other avenues to generate revenue and complement the earning from the crude oil sale. Government has resorted to VAT increase because it’s the quickest way to generate funds. But what is Value added tax (VAT)? A value-added tax is a consumption tax levied on products at every point of sale where value has been added, starting from raw materials and going all the way to the final retail purchase. VAT is commonly expressed as a percentage of the total cost. For example, if a product costs N100 and there is a 7.5% VAT, the consumer pays N107.5 to the merchants. The merchant keeps N100 and remits N7.5 to the government. The proponents of value added tax make the argument that a VAT system encourages payment of taxes and discourages attempt to avoid them. The fact that VAT is charged at each stage of production rewards tax compliance and acts as a disincentive from operating in the black market. It also helps to generate revenue to the government .The opponents of VAT claim that it unfairly burdens people with lower income. Unlike a progressive tax, a VAT is like a flat tax where all consumers of all income level pay the same percentage, regardless of earnings. The proposed VAT increase will fetch more resources or revenues to the government. I learnt that based on the agreed sharing formula, state governments would get the bulk of resources. State governments are expected to get 50%, local government 35% and the federal government 15%. However, the hue and cry that greeted the news of hike in VAT cannot be unconnected with the high rate of poverty in the country and lack of financial prudence among the states government. Evidence is the inability of some state governors to meet up with the salary obligations of their states in spite of the bailouts dished to them by the federal government. Source: This day

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Illegal Tax deductions: FIRS to refund $2m, others to General Electric

Tax news / Tobi Aminu

The Federal Government has urged General Electric to refund N360 million and two million dollars excess withholding tax (WHT) deducted from Arco Petrochemicals Engineering Company Limited, through its business dealings with General Electric (GE) International Operations Nigeria. This was part of outcome of the negotiations between FIRS officials, General Electric, ARCO and the Trade Union Services Department of the Federal Ministry of Labour and Employment in Abuja on Tuesday. The News Agency of Nigeria (NAN) recalls that GE, a multinational company operating in Nigeria, had engaged Arco, an indigenous Nigerian oil servicing company, for the supply of local personnel. But Arco in one of its letters dated June 5, 2018, claimed that GE deducted 10 per cent as withholding tax for the contract between 2006 and 2015, against the five per cent stipulated by Nigerian law. The company said the applicable tax rate should be five per cent in line with the FIRS Circular No. 2006/02, dated February 2006. Following the controversial tax remittance disputes between General Electric (GE) and Arco Group Plc, 60 per cent of the worker’s entitlement have not been paid since 2009. An official of the Ministry of Labour and Employment, who pleaded anonymity said, although the Federal Government was not a debt collector, it intervened because ARCO accepted responsibility that they have financial obligation to settle people’s salaries and Union dues. “The ministry is not a debt collection agency, it came into the matter because ARCO accepted its financial obligation for the settlement of salaries and union dues, the company said the only way it could complete the payment is if GE made a refund to it. “We gave them three weeks to begin process of refund for those monies that they have an understanding that they were actually over-payment to FIRS. If there is no contention on that, within one week, GE should initiate the process of refund. “FIRS said they have to go through some processes before they can get cash back to pay. For those that there are contentions, let them try to get their books together and reach an agreement within two weeks. “The unions involved said they have the list of what is due to their members that has not been paid by ARCO. We expect that those reconciliations will be completed and payment will be made.” Mr Amadike Ikechukwu, Branch Chairman, ARCO Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said ARCO paid field workers 100 per cent of their entitlement but paid only 40 per cent to other categories of staff when their employments were terminated. He said ARCO claimed that it could not complete the payment because the American company, General Electric, deducted 10 per cent withholding tax from workers earnings and paid the sum, which runs into millions of dollars, to FIRS. “As union leaders, we agree with the commitment made by FIRS and GE. We are optimistic that the remaining 60 per cent will be paid to the workers,” he said. (NAN). Source: The Sun

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FG denies Guinness, Dangote, 13 others tax relief

Tax news / Tobi Aminu

The Nigerian Investment Promotion Commission has rejected the application of 15 companies seeking pioneer status under the Industrial Development Income Tax Act. The pioneer status is an incentive from the Federal Government which exempts companies from income tax. It is also known as tax holiday and generally regarded as industrial investment device. This means the companies with pioneer status do not have to pay tax for a certain period of time, allowing the companies to get established. This tax exemption can be full or partial. The products or companies suitable for pioneer status are industries or products that do not already exist in the country. An analysis of the second quarter Pioneer Status Incentive report obtained from the NIPC showed that while 15 companies had their applications rejected, approval in principle was given to 10 firms. The report stated that two firms had their applications extended while 181 other applications were still pending. It put the number of firms currently benefiting from the tax incentive scheme at 32 while 104 companies had abandoned their applications with the NIPC. The 15 companies whose applications were rejected are Umugini Asset Company, Aristocrats Industries Ltd, Guinness Nigeria Limited, StrongPack Limited, Grit System Ltd, Scott Industries Limited and Flexipack Ltd. Others are Ultimus Constructions Ltd, NG Clearing Ltd, Dangote Ibese Lines 3 and 4, Dangote Cement Obajana Line 4, Promasidor Nigeria Ltd, Daraju Industries Ltd, West African Packaging Ltd and Flour Mills of Nigeria Plc. Providing reasons for the rejection, the commission in the report stated that the requests from two out of the 15 firms were time barred, while the activities of 10 other firms were not covered under the pioneer status-incentive list. For the other three companies, it explained that their applications were rejected because their expansion projects were not eligible under the Industrial Development Income Tax Relief Act. The NIPC in the report also stated that 10 companies got approval in principle for tax incentives. The companies are Amarava Agro Processors Ltd, Solis Agro Ltd, Indigo Feeds Nigeria Ltd, Polar Petrochemicals Ltd, Royal Pacific Group Ltd, Wacot Rice Ltd, Olam Hatcheries Ltd, Crown Flour Mills Ltd, Gowus Nigeria Ltd and Harvestfield Industries Ltd. Source: Punch

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Accountants to FG: Don’t increase VAT

TAX SERVICES / Tobi Aminu

The federal government shouldn’t increase Value Added Tax (VAT) just because Nigeria has the lowest VAT rate in the world as its economic conditions are not the same with countries with high VAT, the Association of National Accountants of Nigeria (ANAN) has said. The president of ANAN Prof. Muhammad Akaro Mainoma who spoke at the ANAN 24th annual conference which began in Abuja yesterday also said what the federal government should focus on is to expand the tax nets to capture those presently not paying taxes. He also said if the FG must increase VAT, it should be on luxury goods only. The two-day conference has the theme “nation building and sustainable growth: challenges and prospects.” “Nation building is not about competition or copying from other countries. Our circumstances are different. We must understand that we cannot just increase VAT rate because our own is the lowest. We can increase receipt from VAT by doing other things,” he cautioned. According to him, “if we learn properly, we can adjust the vatable goods, we can differentiate the rates and charge higher rates for luxury items. The process requires a lot of learning. The countries with higher rate have different economic conditions and living standard. We must appreciate that” he noted. Speaking on the theme of the conference, the ANAN president said the task of nation building involves everyone. He noted that the “easiest way to build the nation and sustain it is through Learning, Entrepreneurship, Goal Congruence, Accountability, Collaboration and Youth Development (LEGACY). He also said the Accountant is not only expected to create value for the present but to ensure the sustenance of the value. We do not only prepare historical statements but prepare projections. We must not produce to the extent that we destroy the system that others after us cannot make use of it. Prof. Mainoma also told the gathering that the Association is working hard to improve on it’s professionalism and reposition the institution. “We have secured a 5-storey building ‘ANAN House’ as permanent Head office in Abuja. This would enhance closer collaboration with key stakeholders” “We are currently upgrading the Nigerian College of Accountancy to ‘ANAN University of Accountancy’ to critically contribute to the advancement of the various fields of Accountancy and research.” “ANAN has commissioned her Education and Training Committee to conduct a maturity assessment to receive feedback from members on sixteen Key Success Areas (KSAs) across four broad characteristics: Sustainability, Relevance, Professionalism and Member Value to support ANAN strategic envisioning at 40 years.” “ANAN has improved her advocacy in public policy” among others. The Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, who who declared the conference open also called on the Accountants to partner the government and offer useful suggestions on how to grow the economy. The Minister who was represented by the permanent secretary, special duties in the ministry, Dr. Mohammed Dikwa also said the professional advise from ANAN is particularly critical now that the federal government has constituted an economic Advisory team. The Federal Inland Revenue Service Chairman, Mr. Babatunde Fowler who delivered the keynote address faulted ANAN on the call for VAT not to be increased at this time. Mr. Fowler who was represented by Mr. Abiodun Aina, the Coordinating Director, FIRS, said both the VAT increase and expanding the tax net need to happen concurrently as the government need funds to execute capital projects. He said what ANAN and others should be concerned about is holding government to judiciously use the funds so generated from VAT increase. He said taxes serve as the major sources of revenue to the government of Nigeria. He noted that the taxes collected over the years have contributed to nation building and sustainable growth and development. However, he said tax administration in Nigeria faces a number of challenges which inhibit the provision of an efficient, professional and courteous tax service to the taxpayers. “I therefore call on you in your capacities as professional accountants to partner with FIRS to drive domestic resource mobilisation towards funding of SDGs in Nigeria” Mr. Fowler said. Source: Daily trust

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Tax vacant houses, UN Rapporteur urges FG

Tax news / Tobi Aminu

Ms Leilana Fartha, UN Special Rapporteur on the Rights to Adequate Housing, on Monday urged the Federal Government to impose vacant home taxes with a view to addressing housing challenges in the country. Fartha at a news conference in Abuja expressed concern over the human rights crisis presented by poor living conditions in Nigeria’s informal settlements. According to her, the informal settlements house about 69 per cent of the urban population. She said, “Most residents in Nigeria’s ballooning informal settlements live without access to even the most basic services, like running water. “And they lack any security of tenure, forcing them to live in constant fear of being evicted. “My 10 days fact-findings visit to Nigeria has presented an economic inequality in the country, which has reached an extreme level and is playing itself out clearly in the housing sector. “There is an estimated housing shortage of 22 million units. “At the same time, newly built luxury dwellings are springing up throughout cities and made possible often through the forced eviction of poor communities. “These units do not fulfil any housing need, with many remaining vacant as vehicles for money laundering or investment,’’ she said. While urging the Federal Government to take urgent measures to address homelessness and poverty, Fartha advocated for a declaration of a nation-wide moratorium on forced evictions. “Government must address the grossly inadequate housing conditions with the urgency and rigour befitting a human rights crisis of this scale. “Apart from establishing a national commission to investigate gross human rights violations in the context of forced evictions, government should provide basic services to all informal settlements. “And must increase the number of shelters for persons in situations of vulnerability,’’ Fartha said. She further expressed worry that the Bill for an Act to provide rent control failed in the National Assembly. According to her, when the bill for rent control first hit the National Assembly, it wasn’t ripe “It is unfortunate that the bill died in NASS. “The idea of controlling rent caps is hotly debated in many countries. “New York just tried to have rent control laws passed; Barcelona is close to getting rent-free as rent is actually frozen for some period of five to seven years. “So, in many jurisdictions, they have started to impose a vacant home tax. “I support that kind of move from human rights point of view only where that money from the tax is directly put into the creation of affordable housing. “In the case of Nigeria it could be used as fund to upgrade informal settlements.” Source: Punch

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No Going Back on Aggressive Tax Drive, FG Insists

Tax news / Tobi Aminu

The Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, has said there is no going back on the federal government’s determination to increase public revenue through intensified tax collection. This is coming as the Tax Leader, PwC, Mr. Taiwo Oyedele, has raised the alarm that Nigeria’s tax system contains 354 different taxes, stressing that these multiple taxations do not allow businesses to thrive. Speaking during the Lagos Chamber of Commerce (LCCI) 2019 Presidential Policy Dialogue on the Economy, held in Lagos at the weekend, Adebayo, said those expecting the government to reduce taxes and at the same time increase revenue to meet its responsibilities to the country should come and show the government how to perform the magic. He said: “You want us not to increase tax but you want us to increase revenue. May be, you will come and advise us on how to do it because I think that will require some serious magic. But one thing I can assure you is that I don’t think government has any plan to reduce tax at this point in time. “What we are doing is that government has embarked on aggressive tax collection and is doing everything possible to increase the tax bracket so that all the money the government has not been able to get in the past will be collected to improve our revenue generation.” The minister said he was at the Presidential Policy Dialogue to hear concerns of the private sector operators and transmit them to the government for favourable policy formulation. “I believe that there are certain things that should be done by the private sector. That is why we are here. It is for you to tell government how to make it easie for you to achieve these things. “If you tell us, and advise us on how government can assist to make it easier for you to promote your businesses, then we will do our best to make things easier for you. I am here to listen to your problems,” Adebayo said. The minister’s statement came after the President of LCCI, Mr. Babatunde Paul Ruwase, spoke the minds of the organised private sector in the opening in which he decried the crippling effects of taxation on businesses. Ruwase said: “Multiple taxations are still issues with many companies. There are also issues of multiple levies and fees by government agencies at the federal, state and local government levels. While we were grappling with this, we heard the announcement of an increase in VAT from five percent to 7.5 percent. “This will no doubt put additional pressure on businesses because consumer purchasing power is already weak.” He noted that these are not the best of time for the Nigerian economy, saying the short-term outlook of the key economic indicators was not looking bright. He also called for policies that would transform the economy and end the countries reliance on oil, which was the major trigger of the economic downturn in Nigeria because of the volatility in oil price. “This time calls for reforms in the economy. We need the right mix of policies that will achieve the desired outcomes. I am aware that some policy choices have been made by the present administration to promote economic diversification, stabilise the foreign exchange market and promote small businesses. Evidently, there are still some works to be done. “There is need for regular engagements and communication on policy issues to ensure quality feedback that will enrich the policy making process. “This should cover macroeconomic policies, sectorial policies. These will include foreign exchange policy, trade policy, tax policy, energy policy, transport policy, industrial policy, agricultural policy, ICT policy, among others. Some of these are cross cutting, while others are sector specific. “The message is that regular engagement with relevant stakeholders in the various sectors will bring a lot of value. The regulatory environment needs to align with this vision as well. This policy dialogue is our contribution to this process,” Ruwase said. In another development, the Tax Leader, PwC, Mr. Taiwo Oyedele, has advised that government should create policies that would enable businesses to grow, rather than over-burdening businesses with taxes in an era when governments elsewhere were reducing taxes to encourage businesses. Oyedele, who spoke at the 2019 Annual Conference of the Finance Correspondents Association of Nigeria (FICAN) in Lagos at the weekend, said Nigeria’s tax system was a serious disincentive to businesses because the government did not seem to appreciate that firms needed to be prosperous to be able to pay tax. The theme of the conference was “Unlocking Opportunities in Nigeria’s Non-Oil Sector.” According to him, all the tiers could collect as much revenue as they are doing currently from just five taxes against the 354 different taxes that currently exist in Nigeria presently. “Nigeria has a tax system that does not allow businesses to thrive whether they are small or big. There is a provision in the Nigerian tax law that taxes a holding company twice. “The company tax rate in Nigeria is one of the highest in the world. We are the top 10 in the world for highest income tax rate. About 40 percent company tax. “It does not make sense. Government has to remove tax disincentives. The business community should ask government to remove disincentives that do not allow them to do business rather than begging for incentives,” Oyedele said. He also stressed that the government was over burdening the informal sector with taxes. “A business earning as low as N5,000 is expected to file for VAT while in Ghana a business making less than N1 million equivalent is not expected to file for VAT. “In Kenya, it is N17 million equivalents. South Africa is N33 million. All these three economies are smaller than Nigeria. Why is Nigeria different?” he asked He added: “I look at personal income tax, in Ghana if you do not make about N500,000 you will not pay personal income tax at all. It is more than

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