At a time when businesses in Nigeria are crumbling, as a result of the economic upheaval the nation is passing through, the Federal Government has received a stern warning to eradicate multiple taxation.
This kind of taxation rescinds economic growth rather than increase it.
As a result, the Nigerian Communications Commission (NCC), wants the government to end multiple taxation regime.
The regulatory body says multiple taxation is never the solution to the economic growth Nigerians desire.
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The Executive Commissioner of NCC, Adeleke Adewolu, gave the warning, at a regional stakeholders’ workshop on multiple taxation and regulations in Ibadan, Oyo state.
Speaking on the theme, “Multiple taxation: An impediment to economic development,” he described multiple taxation as a clog in the wheel of economic growth.
Adewolu, said that the aim of the workshop was to address the problem associated with multiple taxation and find a way to solve the problem.
Eradicate Multiple Taxation
He explained that the National Tax Policy of 2017, emphasises the need to eradicate multiple taxation at all tiers of government.
More so, the policy states that taxes similar to those being collected by a level of government should not be introduced by another level of government.
Furthermore, Adewolu, said the paradox of multiple taxation was that it negatively impacts the ease of doing business.
Also, it shrinks the tax base, increases tax evasion and complicate tax compliance.
“Despite the prospect of accelerated economic growth, multiple taxation, which the World Bank termed as ‘nuisance taxes’, continues to prove to be a bane on economic development in the country.
He said taxation, in and of itself, is a veritable tool for economic development, but multiple taxation is an impediment to economic growth.
“However, the question we are here to provide answers to, is how a fiscal tool for economic development like taxation can become inimical to economic growth?
“So, let’s start by correcting some misconception about taxation, particularly the misguided notion of taxation as a penal tool on thriving business enterprise.”
Why Tax Is Key To Economic Growth
Furthermore, the NCC boss, noted that taxation is the backbone for public finance, as it provides guaranteed and sustainable sources of funding for social programmes and public investments.
“Tax is crucial for making growth sustainable and equitable. Thus, taxation by design is an instrument for economic growth.
“It is important to acknowledge and support the initiative of all tiers of government in using tax 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 types of taxes typically manifest 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 government to disincentivise development.
“It is pertinent to note that the National Tax Policy 2017, emphasises the need to eradicate multiple taxation at all tiers of government.
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“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,” he said.
Also, another challenge that the NCC boss sees with multiple taxation is that it does not lead to increment in government revenue.
Multiple taxes make profitable businesses, unprofitable and negatively impacts the ease of doing business.
The government will surely be at the losing end.