By Celestine Okafor (Editor-in-chief)
Telecoms regulatory agency in Nigeria, the Nigerian Communications Commission (NCC), on Monday, advised that multiple taxation might slow the growth of the nation's economy.
The NCC’s Executive Commissioner for Stakeholder Management, Mr Adeleke Adewolu, issued the warning on behalf of the Commission during a regional stakeholders’ workshop on multiple taxation and regulations held in Ibadan, the Oyo state capital.
The event was attended by various stakeholders including industry experts, telecommunications firms and representatives of state governments.
Adewolu who dissected the theme of the workshop: “Multiple Taxation: An impediment to Economic Development,” stated that multiple taxation has remained a major problem to the economic growth and overall development in the nation over the years.
He explained that the aim of the workshop specifically was to address the associated challenges with multiple taxation in the country with a view to finding a workable solution to it.
Adewolu also stated that it is noteworthy that the National Tax Policy of 2017 harps on the need to eliminate multiple taxation at all levels of government. He added that the policy states that taxes similar to those collected by one level of government should not be introduced by another level of government.
The paradox of multiple taxation, Adewolu posits, is that it reduces the ease of conducting business, diminishes the tax base, incentivizes tax evasion, and complicates tax compliance.
Adewolu said, “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 emphasize 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 misconception about taxation, particularly the misguided notion of taxation as a penal tool on thriving business enterprise.”
The NCC's Executive Commissioner for Stakeholder Management, however, stated that taxation is the backbone of public finance since it provides assured and sustainable sources of money for social programmes and public investments, while also serving as a tool by the government to effectively and efficiently share nation's 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 has become cancerous to economic development.
“These type of taxes typically manifests 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 the government to disincentivize 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 harmonizing and eliminating multiple taxation,” he said.
Adewole further stated that the paradox of multiple taxation is that it does not hike the revenue profile of the government and also that the crippling effect of taxes is that it makes otherwise profitable businesses unprofitable, reduces the tax base, encourages tax evasion, and complicates tax compliance. NNL.
