Stakeholders Call for Review of Tax Policies in Real Estate Sector

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Emma Okonji

Worried that the effects of the high rate of taxes is taking a toll on the real estate sector, its stakeholders on Tuesday, called on the federal and state governments to review their tax policies and provide incentives where necessary.

The stakeholders who spoke at the first Construction and Real Estate Group Seminar, with the theme: Navigating Tax Issues In Real Estate Transactions, organised by the Nigerian-British Chamber of Commerce (NBCC) in Lagos, said there was need for people to pay taxes, but insisted that taxes must not be imposed in such a way that will force taxpayers out of business.

There expressed worries the that government pays less attention to the survival of any business, as long as it (government) collect taxes at all cost. The stakeholders who were particularly concerned about Company Income Tax and Value Added Tax, called on the federal and state governments to come up with clear terms for the payment of such taxes, which they said, were contradictory and confusing, while calling for total review of the tax policies in the country.
The forum called for review of tax policy at the federal and state government levels. Tax payers in Lagos are of the view that the Lagos State government is unduly imposing taxes on them with the motive to run them out of business

Deputy President of NBCC, Mr. Akin Olawore, who spoke to THISDAY shortly after the seminar, said the Chamber created idea focus group, and charged them with the responsibility of discovering societal challenges, in order to create solution to address issues.

“The essence of the seminar is to address tax issues in the real estate sector. The Federal Government and the Lagos State Government are keen about the ease of doing business and the forum seeks to address tax issues in real estate transaction as it relates to ease of doing business,” Olawore said.

“What was observed was that taxes are no longer used by government as a measurable tool, but as a revenue generating tool. It is not being used to direct development, but being used to generate money for government at the detriment of tax payers.

Government needs to loosen taxes in order to develop the economy. Government can increase taxation when it wants to reduce consumption, especially when government feels three is too much money in circulation and people are consuming too much, with large appetite for importation. Such tax could reduce consumption of foreign goods and services. But when government discovers that the economy is shrinking and things are becoming tight, government should be able to loosen taxes and give the people some breathing space,” Olawore said.

According to him, when the US had financial crises in the past, they relaxed tax and that is how it is done globally and Nigeria should be able to learn from other countries of the world. He said government must ensure enough cashflow in the hands of the people so that manufacturers will be able to produce and and people will be able to do good businesses, and jobs will be created.
Representative of the Chairman, Board of Internal Revenue Service in Lagos, Mr. Tunji Oshekun, who defended government position in the area of tax collection, said the money collected by the Lagos State Government on taxation is being used to develop the state by providing essential amenities like roads, electricity and water for citizens of the state.
But stakeholders were of the view that government should reduce the rate of taxes levied on citizens.

If taxes are reduced, more people will pay their taxes and government will make more money. Today not everybody is paying tax and we have a lot of tax evaders because they cannot afford to pay high taxes, so they have refused to register their properties. But when taxes are reduced, more people will register their businesses and properties, more people will go to bank to borrow money and government will make more money from the increased volume of transactions, the stakeholders said.

Olawore warned that should the challenges of tax persist, the nation will not develop and it will affect job creation. It will scare foreign investors and the few local investors will continue to struggle to make ends meet, and corruption will increase because people will begin to look for short corners. He was however optimistic that government would listen to the people and reduce the financial burdens of the citizens as they relate to tax collection.