In a significant initiative to combat the detrimental effects of multiple taxation and regulations on the Nigerian economy, the Nigerian Communications Commission (NCC) recently hosted a Regional Workshop in the historic city of Ibadan, Oyo State. The workshop gathered key industry stakeholders and senior government officials from the South West Geo-political Zone, fostering a deep understanding of the economic challenges posed by excessive taxation and regulation imposed on telecom companies by states and their agencies.
According to the statement, the workshop aimed to shed light on the pressing issue of multiple taxation, which has been likened to “nuisance taxes” by the World Bank. These taxes, often imposed by various levels of government, have hindered economic development in Nigeria. This is an opportunity to discuss how taxation, a crucial fiscal tool for economic development, can paradoxically become an impediment to progress.
Mr. Adeleke Adewolu, the Executive Commissioner for Stakeholder Management at the NCC, delivered a keynote speech on behalf of the Commission. He began by highlighting Nigeria’s status as Africa’s most populous country and the largest economy on the continent. This position comes with the expectation of substantial economic growth that can benefit the entire West African region, he added.
Adewolu acknowledged that while taxation is an essential tool for economic development, the existence of multiple taxation, or what the National Tax Policy 2017 terms as ‘nuisance taxes,’ has hindered progress. He emphasized the misconception that taxation is a punitive measure against thriving businesses and clarified that taxation, when appropriately designed, is an instrument for economic development.
“Multiple taxation, as defined in the National Tax Policy 2017, involves imposing the same or similar taxes on the same income base, transaction, or entity by one or more levels of government in different jurisdictions. While some level of multiplicity is expected in a federal system of governance, levying the same tax on the same entity by multiple states or local government councils should be avoided.
“The adverse effects of multiple taxation include a reduction in government revenue, making previously profitable businesses unviable, hindering the ease of doing business, shrinking the tax base, promoting tax evasion, and complicating tax compliance. The World Bank has warned that overtaxing a specific tax base can lead to declining overall tax revenue as businesses either shut down or significantly increase tax evasion.
Adewolu noted the efforts made by President Bola Ahmed Tinubu, who signed Executive Orders to curb arbitrary taxes and the inauguration of the Committee on Fiscal Policy, Tax Reforms. These initiatives aim to harmonize taxes and foster a conducive environment for local and foreign investments.
He continues, the workshop aimed to reaffirm the principles of taxation, including neutrality, efficiency, certainty, simplicity, effectiveness, fairness, and flexibility. It encouraged governments at all levels to adhere closely to these principles and collaborate in harmonizing and eliminating multiple taxation.
Adewolu expressed optimism that the workshop would dispel misconceptions about taxation and inspire renewed efforts to eradicate multiple taxes, fostering a more business-friendly environment that allows the Nigerian economy to thrive.
In conclusion, he emphasized that taxation should be viewed as a win-win solution for steering the course of the national economy, fostering growth, and creating an environment conducive to sustainable development. The workshop served as a pivotal step toward achieving these goals, he added.
