Looking at the huge national debts inherited by the new government, business stakeholders are advocating tax expansion rather than tax increment for the purpose of protecting Nigerian companies.
They also emphasised on the best strategies for companies to adopt in order to survive the likelihood of adverse effects of taxation that may become imminent, as a result of global and national economic challenge.
This was deliberated at the fifth symposium of Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI): 2023 Issuers and Investors Clinic Holding held in Lagos with the theme, ‘Nigeria Tax Law: Matters Arise’.
Speaking, the chairman of IIADRI, Sebastian Udoh said: “looking at the National external and internal debt stock is put at N80 trillion. Our budget deficit is N11.34 trillion in 2023, the World Bank and African Development Bank (AfDB) are of the view that 96.3 per cent of the country’s revenue is spent on debt servicing.
“Meanwhile the revenues from oil and non-oil sectors are quoted by the Central Bank of Nigeria (CBN) to have dropped by 60 per cent and 3.7 per cent respectively in February 2023.”
He explained that, “Nigeria has just witnessed a change in government. Is the government likely to look in the direction of tax increase or tax expansion? What would be the best tax policies that this government should adopt that are capable of engendering corporate growth?
“This is why this Symposium come up with recommendations to companies on how to manage the tax regimes, take advantage of tax incentives, embrace pioneer status and avoid taxes legitimately.”
The president of Lagos Chamber of Commerce and Industry (LCCI), Dr. Michael Olawale-Cole stated that, “it is appropriate because this is the time when the business community is in search of solutions to various challenges faced by corporations vis-à-vis tax law and tax administration in the country.”
Olawale-Cole emphasised the need for government to expand the tax-base rather than increasing the tax rate, which will have a detrimental impact on the companies’ operations and to also prepare Nigerian companies for profitability during this depressed or recessed time.
Also, the president of Manufacturers Association of Nigeria (MAN), Mr. Francis Meshioye stated that, “it is crucial to stress that the amount of revenue the government can raise through taxes and the success of enterprises crucially depend on the health status of the economy and how the government is managing and coordinating its taxation activities in that economy.”
He emphasised that taxes not only hold immense importance for the government but also significantly affect the operations of the manufacturing sector, especially now that most of our industries are operating in a harsh and depressed environment.
Meshioye noted that, MAN has, over the years, lamented the burden of multiple taxes, fees, and levies imposed by all tiers of government on its members, pointing out that, in 2022, the burden of indirect taxes on Nigeria rose by approximately 19 per cent and the burden of taxes is fast decapitating industrial activities in the country.
“While MAN appreciates the current call by the past administration for a committee to look into the issue of excess taxes in the country, until this issue is completely resolved the perennial huge tax burden the government is levying on the manufacturing sector will continue to adversely affect the sector’s operations and competitiveness,” MAN president said.
IIADRI is a registered non-governmental organisation with a passion to entrench harmony and engender growth in the Nigerian Stock market.
