Saturday, April 17, 2021
  • Markets & Companies
    • Stock Market
    • Companies
    • Appointments
    • Commodities
  • Business & Economy
    • Energy
    • Agricultural Economy
    • Insurance & Pensions
    • Aviation
    • Maritime
    • Road Transport
    • Financial Inclusion
    • Investment
    • Manufacturing
    • Consumer Goods
  • INNOVATION
  • EMPIRE
  • OPINION
  • CULTURAL CURRENTS
  • Features
  • AE Magazine
  • CORPORATE RENDEZVOUS
Financial Street is a meeting point for technology, economy, and journalism.
No Result
View All Result
  • Markets & Companies
    • Stock Market
    • Companies
    • Appointments
    • Commodities
  • Business & Economy
    • Energy
    • Agricultural Economy
    • Insurance & Pensions
    • Aviation
    • Maritime
    • Road Transport
    • Financial Inclusion
    • Investment
    • Manufacturing
    • Consumer Goods
  • INNOVATION
  • EMPIRE
  • OPINION
  • CULTURAL CURRENTS
  • Features
  • AE Magazine
  • CORPORATE RENDEZVOUS
Financial Street is a meeting point for technology, economy, and journalism.
No Result
View All Result

Tax policies as clogs in Nigeria’s quest for development

Nnamdi Abana by Nnamdi Abana
March 12, 2020
in Front Page, Special features
0
Tax reliefs every Nigerian entrepreneur must know
0
SHARES
16
VIEWS
Share on FacebookShare on TwitterShare on LinkedInShare on WhatsApp

Entrepreneurs are beautiful brides in any developing society. But Nigeria’s development is under threat due to government’s stringent tax policies, under which entrepreneurs groan, writes NNAMDI ABANA

In Nigeria, entrepreneurs face a lot of challenges in establishing and consolidating their enterprises. Several challenges confront entrepreneurship in the country; while some are minor, others are complex.

READ ALSO

Train 7 project: Nigeria may sanction expatriates

Nigeria seeks Commonwealth’s support on net-zero emissions

Despite the influx of enterprises in Nigeria, there are critical issues that need to be addressed, especially stringent tax policies, which have been a clog in the wheel of progress for many enterprises in the country.

Read Also:

  • Food prices in Nigeria and need to halt herders/farmers' conflicts
    Food prices in Nigeria and need to halt…
  • Executive Order 007 indispensable for road infrastructure development - Shonubi
    Executive Order 007 indispensable for road…
  • Reshaping organisations' culture in new world of work
    Reshaping organisations' culture in new world of work

Some entrepreneurs are compelled to close shop due, mainly, to ​tax-related issues such as multiple taxation and enormous tax burden.

According to the Small and Medium Enterprises Development Agency of Nigeria, 80 per cent of the Small and Medium-sized Enterprises die before their fifth anniversary. Among the factors responsible for these untimely close-ups are tax-related, Financial Street gathered.

In a recent symposium organised by the ​January 9 Collective ​themed ​‘The Tax

Debate: For Young Businesses to Grow, Established Businesses to Survive’​, the Oba

Alara-elect of Ilara Kingdom in Epe, Lagos State, Olufolarin Ogunsanwo, suggested, “In the case of SMEs, tax must be imposed in such a way that puts their income and need for survival into consideration. For instance, businesses that make profit are usually subjected to multiple taxation in their first three years due to the rules for taxation of new businesses, thereby increasing the risk of failure of SMEs within the first few years of business.

“Also, exemptions of companies with at least 25 per cent of their paid-up capital as imported equity from minimum tax is discriminatory to Nigerian-owned businesses.”

According to the former chairman of Lagos

Inland Revenue Services, the policy discourages investment and increases the risk of failure for companies in periods of little or no profitability in the case of SMEs.

“A good number of the SMEs are not able to adequately benefit from tax incentives due to the size of their operations,” the monarch stated.

In the same vein, the Director of Research and Advocacy at Lagos Chamber of Commerce and Industry, Dr.Vincent Nwani, had lamented that multiple taxation and infrastructure deficits were harming the nation’s economy, with businesses bearing the brunt.

He pointed out that the nation was not doing well in global ranking, as it ranked

177th among 190 countries in infrastructure, and 124th among

140 countries in competitiveness.

“Multiplicity of regulations, taxes and reforms are issues. There are some sectors with up to 80 different types of taxes, especially in oil and gas as well as manufacturing. This is why a lot of businesses are moving from formal to invisible,” Nwani had stated at a Breakfast Policy Dialogue in Lagos on October 18, 2017.

Chairman of Heirs Holdings, Tony Elumelu, once said that multiple taxation and levy kill 95 per cent of SMEs in Nigeria.

This statement he made at the Lagos Business School Alumni Association 2017

Alumni Day in Lagos still remains relevant in Nigeria’s business space.

He frowned on the scenario where only five per cent of the small businesses survived after one year, describing it as a big disincentive to the nation in terms of employment creation.

The entrepreneur added that multiple business regulations, multiple taxation and inconsistent government policies affect SMEs’ competitiveness and their ability to attract capital in their investment climate.

Despite the series of taxes, Nigeria remains the lowest in the world with

10 per cent tax contribution to Gross Domestic Product, he noted.

His words, “It seems we have a big problem, because with high taxation and multiple levies, it is expected that we should have very high tax revenue.”

He urged government to find out the reason for the discrepancy between desired growth and development, while creating a more conducive environment for the survival of SMEs, to reduce the unemployment rate.

“Government doesn’t create jobs; it is the right enabling environment for SMEs that creates jobs,” he emphasized.

Ranked 131 out of 190 countries in the 2020 edition of Ease of Doing Business, Nigeria still has a long way to go in making its economic ecosystem favourable for business.

The EoDB ranking, which the World Bank compiles every year, is often quoted and popular among investors. It has become a yardstick for judging how friendly a country is to entrepreneurs.

close
Subscribe to our newsletter and join thousands of readers of our financial, economic & investments news blog!
We don't spam with your email

Check your inbox or spam folder to confirm your subscription.

  • Facebook
  • Twitter
  • Pinterest
  • LinkedIn

Tags: DevelopmententrepreneursNigeriaTaxTax policies

Get real time update about this post categories directly on your device, subscribe now.

Unsubscribe
Nnamdi Abana

Nnamdi Abana

Related Posts

Train 7 project: Nigeria to clampdown on erring expatriates
Energy

Train 7 project: Nigeria may sanction expatriates

April 16, 2021
We recognise importance of energy efficiency – OPEC boss
ENVIRONMENT

Nigeria seeks Commonwealth’s support on net-zero emissions

April 16, 2021
BUA, Dangote settle rift over sugar pricing
Commodities

BUA, Dangote settle rift over sugar pricing

April 16, 2021
Amref establishes commission to review Africa's universal health coverage
Front Page

IFC seals $300m deal for Africa’s health sector

April 15, 2021
Kenya's economy to grow by 6.4 per cent
Special features

Africa’s economy snails behind galloping others

April 15, 2021
e-commerce boutique
Financial Inclusion

Report: E-commerce adds $900bn to online retail globally

April 15, 2021
Next Post
Nigeria fashion industry has taken over Africa – Aina

Tax policies as clogs in Nigeria’s quest for development

RECENT STORIES

YouTube suspends Nigerian TV evangelist

YouTube suspends Nigerian TV evangelist, TB Joshua’s account

April 16, 2021
Train 7 project: Nigeria to clampdown on erring expatriates

Train 7 project: Nigeria may sanction expatriates

April 16, 2021
Negative growth hits Nigerian States’ IGR

Negative growth hits Nigerian states’ IGR

April 16, 2021
We’ll prioritise access to COVID-19 vaccine

We’ll prioritise access to COVID-19 vaccine – AU

April 16, 2021
AstraZeneca: AZD1222 vaccine met primary efficacy in preventing COVID-19

Africa CDC unsure of second COVID-19 vaccine

April 16, 2021
We recognise importance of energy efficiency – OPEC boss

Nigeria seeks Commonwealth’s support on net-zero emissions

April 16, 2021
BUA, Dangote settle rift over sugar pricing

BUA, Dangote settle rift over sugar pricing

April 16, 2021

TRENDING

  • Adesegun Banjoko, President-elect, National Association of Block Moulders of Nigeria

    Blame govt for high cement price – Banjoko

    0 shares
    Share 0 Tweet 0
  • Professionals need strategy to survive in job market – Funmi Bajulaiye

    2 shares
    Share 0 Tweet 0
  • Affordable housing as mirage despite govt’s intervention

    0 shares
    Share 0 Tweet 0
  • Executive Order 007 indispensable for road infrastructure development – Shonubi

    0 shares
    Share 0 Tweet 0
  • Dealing with car overheating

    0 shares
    Share 0 Tweet 0
Financial Street is a meeting point for technology, economy, and journalism.

© Financial Street 2020. All Rights Reserved.

More Links

  • Privacy Policy
  • Terms of Use
  • Contact Us

Follow Us

No Result
View All Result
  • Markets & Companies
    • Stock Market
    • Companies
    • Appointments
    • Commodities
  • Business & Economy
    • Energy
    • Agricultural Economy
    • Insurance & Pensions
    • Aviation
    • Maritime
    • Road Transport
    • Financial Inclusion
    • Investment
    • Manufacturing
    • Consumer Goods
  • INNOVATION
  • EMPIRE
  • OPINION
  • CULTURAL CURRENTS
  • Features
  • AE Magazine
  • CORPORATE RENDEZVOUS