•Osinbajo laments economic downturns, seeks improved tax net
Deji Elumoye in Abuja and Dike Onwuamaeze in Lagos
Some members of the organised private sector (OPS) have advised state governors to eliminate multiple taxations and introduce measures to further improve Ease of Doing Business (EoDB) in order to attract investors and promote economic growth.
This is coming as Vice President Yemi Osinbajo has said Nigeria has faced severe economic downturns, hence the need to widen the tax net so that more people who are eligible to pay tax can pay.
The advice by the OPS followed the recent EoDB report released by the Presidential Enabling Business Environment Council (PEBEC), which ranked Gombe State number one among the 36 states with an overall average score of 7.69 out of a maximum score of 10.
According to officials of the Nigerian Association of Chambers of Commerce and Industry (NACCIMA), Nigerian Employers’ Consultative Association (NECA), and financial experts, who spoke to THISDAY, state governments should focus on eliminating multiple taxations, improving electricity supply, transportation, security and investment promotion, to ease doing business.
They also called for streamlining tax administration, introduction of legislation to provide a legal framework for doing business in their respective states, creation of business councils to render one-stop-shop for business registration, and the creation of industrial parks and the development of rural infrastructure, especially in the areas of transportation and electricity.
A Professor of Economics and Public Policy, University of Uyo, Akwa Ibom State, Professor Akpan Ekpo, told THISDAY that state governments should create investment councils that would reduce bureaucratic bottlenecks investors encounter while doing business at the sub-national levels.
Ekpo added that state governments should task their legislators to enact an appropriate legal framework for doing business, which is among the things that matter much to investors.
He said: “Most states do not have the legal framework for doing business. Very few states have an investment council, or outfit, where those wishing to do business will approach to do everything.
Also, in most states everything revolves round the governor that nothing moves if an investor could not see the governor.”
Ekpo also advised the state governments to generate their own economic statistics to provide information on specific economic indicators like inflation rate, GDP, rather than relying on the National Bureau of Statistics (NBS).
He said: “In those days, the state governments used to have their own data. Now, they no longer have them. They depend on the National Bureau of Statistics (NBS). But these are important because genuine foreign investors look for these things.”
In his contributions, the Director-General of the NECA, Mr. Timothy Olawale, urged the state governments to pursue policies to support businesses and enable their respective state economies to boom rather than policies that are revenue-driven at the detriment of productive activities that are creating jobs.
Olawale also advised the state governments to modify their system of taxation that are unnecessary in 21st century governance system and avoid multiple collections that tax same item of income severally.
He said: “The focus of state governments should be on making and implementing business-friendly policies and law. There should be policy coherence and consistency that prioritise investments, protection of lives and properties.
“State governments need a continuous and symbiotic collaboration with the umbrella body representing the interests of organised private sector in the sub-national in policy formulation, administration and implementation.”
NACCIMA advised the states to focus their efforts on improving the EoDB on their areas of comparative advantage in order to attract and encourage investment from the private sector and foreign investors.
Also, the Director-General of NACCIMA, Ambassador Ayo Olukanni, told THISDAY that “a state that is endowed with agricultural potential and wants to harness its potential in the area of agriculture and agric business must pay attention to issue of land acquisition, among others. “Likewise a state that is endowed with mining resources must have an agency with competency in the area of mining administration and capacity development of technical and professional skills in that area.”
On his part, the Chief Executive Officer of the BIC Consultancy Services Limited, Dr. Boniface Chizea, harped on the need for the states to evolve friendly system of taxation that should not put pressure on enterprises with multiplicity of taxes.
Chizea said the tax burden, as a matter of policy, should “be spread with a view to broaden the tax net. Moreover, state governments should streamline the procedures for getting business permit and Certificate of Occupancy within predictable and reasonable time frame and also develop industrial park and business centres where people can stay and do business.”
He also said that, “state governors must have security outfits that can take the fight to the bandits without allowing them to deliver the first strike because the current wave of violent crime does not help the EoDB.”
Similarly, a Professor of Economics and Chairman of the Goldmark Education Academy, Prof. Mike Idi Obadan, said state governments should focus on the development of rural infrastructure, especially independent power projects, rural electrification programmes and rural roads that would enable the Micro, Small and Medium Enterprises (MSMEs) to thrive and farmers to go to their farms and take their products to the market.
“Transport infrastructure is weak in the rural farming communities. So, they should concentrate on developing rural infrastructure as a basis for encouraging the people in the area of agriculture and agric business,” Obadan said, adding that state governments should “address the prevalence of multiple taxations on the MSMEs that choke them almost out of existence by rationalising them in order to motivate investors.
“Moreover, insecurity should not be seen as solely federal government’s problem as they affect state and local governments. They should establish security networks and vigilante groups because without peace and security there cannot be development.”
Osinbajo Laments Economic Downturns, Calls for Improved Tax Net
Vice President Yemi Osinbajo has said Nigeria has faced severe economic downturns, hence the need to widen the tax net so that more people can pay tax.
Osinbajo made the call while interacting with a delegation of the Chartered Institute of Taxation of Nigeria (CITN), led by its President, Mr. Adesina Adedayo, who visited him at the weekend, at the State House, Abuja.
He said: “We have had severe economic downturns, which of course imply that we may not be able to collect taxes with the aggressiveness that would ordinarily be expected. Several efforts have been made, including the Voluntary Assets and Income Declaration Scheme (VAIDS), which was also an attempt to bring more people into the tax net, including those who have foreign assets. We have also recently taken a step with respect to a lot of the technology companies that are not represented here but who do huge volumes of business here.”
According to him, the Finance Act has shown the commitment of government to ensure that the big technology companies do not escape without paying their fair share of taxation in Nigeria.
He added that many of the firms do high volumes in Nigeria and in other parts of the region.
He said: “We have drawn up the regulations and we are prepared to go, and I think that we are at least in a good place to tap into some of the tax resources we can get from some of these companies.”
He stated that the federal government has no plans to raise taxes now, adding that there are those who argue that Nigeria’s tax rates are too low, when compared to other places in the region where the rates are much higher.
This, he said, called for balance because higher tax rates can be a disincentive to businesses and investments.
He also emphasised the need for regular interaction between the council and government to address issues bordering on tax legislation, adding that there is need for continuous engagement with the National Assembly.
Earlier, Adedayo, had commended the efforts of Osinbajo in the implementation of key government interventions in the economy.
He said the visit became necessary given the enormous work the Buhari’s administrationhad done towards addressing the huge fiscal challenges in the polity, public financing reforms, and sustained efforts towards addressing infrastructural deficit across the country.
He added that the Nigerian Economic Sustainability Plan (NESP) and other measures implemented was a right response to the challenges posed by COVID-19 pandemic and were largely instrumental to creating buffers for the government at all levels in withstanding the pressures and waves created during the peak period and the aftermath of COVID-19.
