The Nigerian Communications Commission (NCC) has decried the practice of multiple taxation, noting that it encourages tax evasion as opposed to claims that it increases government revenue.
NCC’s executive commissioner on stakeholder management Adeleke Adewolu stated this during a recent regional workshop with industry stakeholders in the city of Ibadan, Oyo State.
The workshop was hosted specifically to brainstorm with senior government functionaries from all the states in the South West in order to build better understanding of how cancerous and harmful the issue of multiple taxes and regulations being imposed on the telecom companies by the states and their agencies and agents can be to the country’s development.
In his speech, Adewolu said that supporting the tax initiatives by the various tiers of government includes indicating where a category of taxes has become cancerous to economic development.
He said, “These type 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 the government to disincentivise development.
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“It is pertinent to note that the National Tax Policy 2017 emphasizes the need to eradicate multiple taxation at all tiers of government. 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 harmonizing and eliminating multiple taxation.”
He added, “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 complicates 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.”
Adewolu noted that President Bola Tinubu, in his commitment to addressing the vexed issue of multiple taxation, recently signed a number of Executive Orders to curb arbitrary taxes in the country.
“Also, 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. This would also facilitate a conducive environment for conducive for local and foreign investment into the country,” he said.
