The Nigerian Communications Commission (NCC) has asserted that the proliferation of multiple taxes poses a substantial impediment to the country’s economic development.
This proclamation was made during a regional stakeholders workshop on the subject of multiple taxation and regulations held in Ibadan, the capital of Oyo State, on a Wednesday.
The event drew notable participants, including Mr. Adeleke Adewolu, the Executive Commissioner (Stakeholder Management) of NCC, Mr. Gbolahan Awonuga, the Executive Secretary of the Association of Licensed Telephone Operators of Nigeria (ALTON), Mr. Temidayo Ashonibare, a legal lecturer, and various stakeholders, including representatives from state governments, industry experts, and telecommunication companies.
During his address on the theme “Multiple Taxation: An Impediment to Economic Development,” Mr. Adewolu emphasized that the pervasive issue of multiple taxation consistently hampers the country’s economic progress. He further elucidated that the primary objective of the workshop was to confront the challenges associated with multiple taxation and chart a course toward effective resolution.
He underscored the importance of recognizing that the National Tax Policy of 2017 places a strong emphasis on the eradication of multiple taxes at all levels of government. Furthermore, the policy explicitly stipulates that taxes identical to those imposed by one level of government should not be introduced by the same or any other level of government.
Mr. Adewolu elaborated that the paradox of multiple taxation has far-reaching repercussions, including hindering the ease of conducting business, narrowing the tax base, incentivizing tax evasion, and complicating tax compliance. These consequences underscore the urgent need to address and streamline the taxation system in the country.
Adewolu noted that: “Despite the prospect of accelerated economic growth, the presence of multiple taxation, which the World Bank has termed ‘nuisance taxes’ has and continues to prove to be a bane on economic development in the country.
“However, before addressing how multiple taxation is an impediment to economic development, it is important to emphasise that taxation, in and of itself, is a veritable tool for economic development.
“The curious question, which this workshop will attempt to answer, is how a fiscal tool for economic development, like taxation, can become inimical to economic development. It is imperative, therefore, to correct some misconceptions about taxation, particularly the misguided notion of taxation as a penal tool against thriving business enterprises.
“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.
“It is pertinent to note that the National Tax Policy 2017 emphasises 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 harmonising and eliminating multiple taxation.”
“The paradox of multiple taxation is that it does not lead to an increment in government revenue, rather, the crippling effect of these taxes is that it makes otherwise profitable businesses unprofitable. It negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion, and complicates tax compliance.”
