The Nigeria Employers’ Consultative Association has asked the Federal Government not to further burden the private sector with the payment of more taxes in its drive to meet the N6.7tn revenue target for this year.
It said businesses in Nigeria were uptight with the payment of over 55 different taxes at the three levels of government, adding that the development had discouraged many citizens from investing in the country.
NECA stated this at its 61st Annual General Meeting in Lagos on Tuesday.
“The incidence of double taxation, particularly consumption tax, has assumed a very dangerous dimension, which we expect the Federal Government to rein in through an appropriate statutory or policy declaration,” the President, NECA, Mr Larry Ettah, said.
While the association encouraged efforts to improve non-oil revenue generation as the most realistic way to reduce the debt service/revenue ratio as articulated in the Economic Recovery Growth Plan, it, however, cautioned the government not to raise revenue by increasing the tax rates for organised businesses and the working class.
Ettah added, “Alternatively, more people should be brought into the tax net by expanding the base. Indeed, improving the national revenue base is key to avoiding continued reliance on borrowing to fund capital projects.
“Ongoing efforts to expand our tax to Gross Domestic Product ratio are also welcome. Nigeria’s tax to GDP ratio, which currently stands at six per cent, is one of the lowest in the world and inconsistent with the goal of having a diversified, sustainable and inclusive economy. At least, 15 per cent tax to GDP ratio is required to achieve sustained growth.”
He, however, commended the government for its efforts at improving the ease of doing business as evidenced by the setting up of the Presidential Enabling Business Council, the design of the ERGP and the signing of seven Executive Orders.
He noted, “We welcome the good news that the ease of doing business in Nigeria is improving as evidenced by the country’s movement by 24 points from 170th position in the 2016 ranking to 145 in the World Bank’s Doing Business Report of 2018.
“Though the success recorded is commendable, it should be improved upon, given the better performance of other developing African countries like Kenya, ranked 92; Ghana, 108; and Mali at 145.”
The Executive Chairman, Federal Inland Revenue Service, Mr Babatunde Fowler, said the government would look into the issue of multiple taxation.
He spoke on the review and revision of the national tax policy, tax laws and regulations, stating, “The Stamp Duties Act (Amendment) Bill, 2017 was introduced in April and is currently undergoing legislative process.
“The Value Added Tax (Amendment) Bill 2015, which is currently being reviewed by the National Assembly, seeks a significant upward review of all the fines and penalties contained in the Value Added Tax Act CAP VI, LFN 2004.”
The FIRS boss said that the impact of the review would help clarify current ambiguities in the VAT and stamp duty laws as well as the imposition of stamp duty on all forms of agreements.
“If the bill is passed into law, defaulting taxpayers will be liable to steeper penalties under the respective bills. Current penalties range between N2,000 and N30,000 under the VAT Act. While in the revised bill, the penalties range between N25,000 and N200,000,” Fowler added.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.