Taxing a specific tax base will lead to increasing revenues up to a specific point, after which the overall tax revenue will decline
By Moses Okorie
Executive Commissioner – Stakeholder Management, Mr Adeleke Adewolu has warned that multiple taxation does not lead to increment in government revenue, but rather cripples the economy.
Adewolu made this known in his keynote speech at the regional stakeholders workshop on multiple taxation and regulations organized recently by the Nigerian Communications Commission, NCC, in Ibadan, the Oyo State capital.
The workshop was hosted specifically to interact with senior government functionaries from all the states in the South West geo-political zone in order to build better understanding on how cancerous and harmful the issue of multiple taxations and regulations being imposed on the telecom companies by the states and their agencies and agents can be to the country’s development.
Adewolu said, “The paradox of multiple taxation is that it does not lead to an increment in government revenue, rather the crippling effect of these taxes, is that it makes otherwise profitable businesses, unprofitable. It negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion and complicate tax compliance.
“According to the World Bank, taxing a specific tax base will lead to increasing revenues up to a specific point, after which the overall tax revenue will decline because companies go out of business, or evasion increases significantly”.
He said in addition to these challenges, the economic burden of multiple taxation is further exacerbated by the administrative burden of complying with these taxes.
“It further makes Nigeria an undesirable ground for breeding healthy business and competitive practices. The effect of this is that, business enterprises in Nigeria struggle to compete with their counterparts abroad. These incidents weakens our economic foundations, devalues the symbol of economic strength, which is our currency – the Naira and contracts our gross domestic product”, he said.
He emphasized that the workshop is an avenue to rethink on approach towards taxation by adhering to its founding principles.
He applauded President Bola Tinubu, whom he said in commitment to address the vexed issue of multiple taxation, recently signed a number of Executive Orders to curb arbitrary taxes in the country.
And also that the inauguration of the Committee on Fiscal Policy, Tax Reforms by the President, which is geared towards harmonizing taxes will provide an avenue to further engage various stakeholders in order to identify their pain points and critical concerns bothering tax and fiscal policies.
Adewolu believed this would also facilitate a conducive environment for local and foreign investment in the country.