Nigerian Businesses Pay Average 48 Taxes To Authorities – Elumelu

Chairman, Heirs Holdings and Founder, Tony Elumelu Foundation,
Tony O. Elumelu, yesterday lamented the multiplicity of taxes in
the country,saying the average businesses pay 48 multiple taxes in
Nigeria.

Elumelu,who disclosed this in his keynote address at the 21st
Annual Tax Conference of the Chartered Institute of Taxation of
Nigeria (CITN), titled, “National Development: Unlocking the
Potentials of Taxation’’,said the development was a far cry from
their contemporaries in other sub- Saharan countries and Hong
Kong,who pay 33 and three taxes resprectively..

He said taxation remains a significant burden for SMEs and
corporates operating in the country.

“With a population of close to 200 million people in Nigeria, we
have only 75,000 registered SMEs in the country. No one needs to
tell us that people are avoiding tax or refusing to be a part of
the system,” he said.

With high cost of compliance, complex and costly business
registration processes, many SMEs are choosing to remain informal,
which in turn results in a low tax base and low tax contribution to
GDP. “Nigeria’s tax to GDP ratio is only circa 6%, compared to far
smaller populations like Rwanda at 16%. Imagine the economic
transformation we can achieve as a country if we can move our Tax
to GDP ratio by 10%. We will raise an additional $40billion in
government revenue – identical to the sum of our foreign reserves,”
Elumelu explained.

He advised government to educate, inform and raise tax
awareness, “Government should drive mass mobilisation of citizens –
let citizens know why they need to pay taxes and give them the
assurance that their tax will be properly utilised.” In addition he
stated that, “government should employ the use of smart tax
incentives to attract and incentivise local and foreign
investors.”

Elumelu also tasked the country’s ambassadors and embassies with
a two year timeline to increase the number of double tax treaties
between host countries and Nigeria.

“Nigeria has 14 taxation treaties while a country like South
Africa has 79 double taxation treaties, and we are the largest
economy in Africa. Our embassies should adopt a target in the next
two years to sign Tax treaties with our top 100 trading partners in
the world.”

Elumelu charged government to put in place tax systems to
encourage SMEs to effectively perform their function as the engine
for job creation in the country .

“Until there is a reduction in what SMEs pay as tax, elimination
of multiple taxation, abolition of minimum income tax and excess
dividend tax, it will be difficult for us to expand the tax base.
It will be difficult for us to attract investors into this country,
and it will be difficult for us to retain the ones already in the
country. It will be difficult for us to mobilise our SMEs to help
create employment that we need so much in this country. It will be
difficult for us to have the citizens hold leaders
accountable.”

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