Multiple taxation, over taxation, punitive taxation, criminal taxation and even devilish taxation! These and many others are the tools with which virtually all state governments are clubbing small businesses to death! And I speak from experience. I own and operate a couple of small businesses in a couple of states and I tell you, I am tired. There is no week that we do not receive one notice or the other of unjustified tax.
It was Cross River State, my own state that came up with cooking tax. They imposed a flat rate tax on every commercial cooking operation from ‘Mama Put’ to the early morning ‘akara’ seller. That scam sought to tax the indomie maker as well as the cooked ‘okpa’ seller. It was called the “carbon emission tax!” Only an uproar from the people of the state got the governor of that state to stand it down.
This is on top of “green tax”, piss tax and other laughable taxations that seem to have been generated by a hack writer in Nollywood! It may interest you to know that all these taxations are usually contracted out to thugs and other sundry felons who use their collection drives as an excuse to rob and intimidate businesses.
As at the last count, more than half of all businesses that were in operation in Cross River State in 2014 have closed down by the end of 2017, yet no one in government seems to understand that multiple taxation works against revenue generation. It indeed reduces revenue accruing to a state because, it discourages and causes the shutdown of businesses with the multiplying effect of staff layoffs!
The simple fact is that all state governments in Nigeria are unfriendly to business and to businessmen because most of the governors have never been businessmen in the true sense of the word. Surely, some were contractors, some were professionals but none was a businessman of the sort who built their businesses purely through trade or manufacturing!
This is the main reason why most of them have no idea of the fact that their taxation policies are actually leading to a net reduction in their internally generated revenue. I do have business activity in Plateau State and our experience there in the recent past is best described as a horror. All manner of people walk into our premises with all kind of letters demanding all kinds of fees. For instance, we handle our refuse ourselves yet, someone brought us a bill to pay for refuse disposal.
We have never seen a refuse service but someone simply thinks that it is his or her right to extort that money from us. This is at a time when most businesses are struggling to stay afloat and pay wages! Indeed, many of us would have shut down our businesses if it was a matter of profit, that one disappeared long ago with the advent of Boko Haram activities and other sundry disturbances there.
Despite the direct losses some of us face by these calamities, nobody thinks about our business losses, but every time a state government thinks about money, it thinks about the little cash flow of small business! Can they go and borrow a leaf from the business growth policies of countries as near as Ghana or Botswana!
Can they simply realise that businessmen need a respite from vampire policies of state governments who give us nothing, who provide no incentives, yet they daily kill our honest and genuine efforts with taxation policies that virtually criminalise our operations. Interestingly, businesses of no fixed addresses are never taxed, they are never even seen to be taxed, but those of us who have physical addresses and physical investments get harassed every day by people who think that the size of our businesses automatically translate to the size of profit.
The other day, we receive visitors asking for the income tax returns of our staff. We reminded them that there is a by-law on minimum taxable income, they didn’t want to hear that. All they wanted was to collect tax from people whose incomes fall within the lower limit allowed!
They seem to forget the laws under which they themselves ought to operate. Simply put, state governments should set up policies that promote businesses rather than policies than kill businesses and raise the already high unemployment levels! In this regard, I commend the Ebonyi State government that even gave grants to some categories of businesses including schools to enable them grow their operations and employ more indigenes of the state, that is what it means to be business and growth friendly.
Other states should emulate that too. Those of us in one legitimate business or the other should be encouraged to stay in business because of the services we render and the many other benefits to society. A situation where civil servants and thugs are unleashed on businesses in the name of taxation is undemocratic and negative to the economic and investment potentials of any state.