The Executive Vice Chairman, Nigeria Communications Commission (NCC) Prof. Umar Danbatta has condemned multiple taxation imposed by different level of government on the same business entity, saying that is inimical to the development of any economy.
The NCC EVC made his position known in his address at the regional stakeholders’ workshop on multiple taxation and regulations titled: Multiple Taxation, An Impediment to Economic Development, which held at Ibadan, Oyo State.
Represented by The Executive Commissioner, Stakeholder Management, Mr Adeleke Adewolu, Prof. Danbatta explained that no economy can grow without imposing some level of taxation. He however, frowned at the imposition of similar taxes on same entity by different levels of government, saying that it will end up crippling the economy and eroding investors confidence.
He said that Multiple Taxation is the imposition of the same or similar taxes on the same income base, transaction or person by one or more levels of government in one or more jurisdictions. He observed that while a level of multiplicity is expected in federal system of governance, the levying of a particular tax on the same person/entity, in respect of the same liability by more than one State or Local Government Council should be avoided.
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“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.
However, 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,” the NCC boss stated.
He hailed the tax reforms initiated by President Bola Ahmed Tinubu especially 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 concerning taxes and fiscal policies.
He said, “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”.
He noted that the paradox of multiple taxation is that it does not lead to an increment in government revenue but rather cripples businesses.
“It makes otherwise profitable businesses, unprofitable. It negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion and complicate tax compliance.
“It further makes Nigeria an undesirable ground for breeding healthy business and competitive practices. The effect of this is that, business enterprises in Nigeria struggle to compete with their counterparts abroad. These incidents weaken our economic foundations, devalues the symbol of economic strength, which is our currency”.
