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 N1 million is South Africa before one should pay personal income tax. But in Nigeria, if one make N30,000 in a year, about N2,500 per month, that person must pay tax here.
Source: This day