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Tag: Multiple Taxation

  • Obi Cubana highlights challenges of entrepreneurs in Nigeria

    Obi Cubana highlights challenges of entrepreneurs in Nigeria

    Mr Obinna Iyiegbu, popularly known as Obi Cubana, has urged the federal and state governments to create a more enabling environment for businesses to thrive.

    Obi Cubana also urged the governments to development infrastructure and boost security to enhance  entrepreneurship.

    Iyiegbu made the call on the sidelines of a conference organised by Gavice Logistics on  igniting innovation.

    The conference held on Saturday on Victoria Island, Lagos.

    The businessman, socialite and philanthropist also said that an enabling business  environment  would make life easier for Nigerians especially the youth.

    According to him, in the logistics business, for example, good roads are important.

    “They need good roads to transport their goods from one point to the other,” he said.

    He called on the governments to construct good roads and find a lasting solution to insecurity.

    “The youths are not asking governments to buy vehicles for them, but to create that enabling environment and remove all those blockages on the road.

    “People buy and sell, but the multiple taxes to worry about is demoralising.

    “If these young people start to get involved in harmful things, who do we hold responsible?

    “Also, people should be able to move from one point to the other without fear of being robbed or kidnapped,” he said.

    Iyiegbu, who is also the Chairman of Cubana Group, advised the youth to be innovative and ready to work in order to be successful.

    “There are different seasons in businesses. It is left for operators of businesses to know how to approach each season.

    “There are times when things are difficult and times when the business is doing very well.

    “Life is a hurdle, and with each challenge faced, you must know how to jump it and continue your journey to the next stage until you succeed.

    “Nobody should stop a journey because times are hard.

    “Therefore, business owners especially the young ones, must be innovative,” he said.

  • NCC opens up on major obstacle of telecom industry

    NCC opens up on major obstacle of telecom industry

    The Nigerian Communications Commission (NCC) has identified multiple taxation as major obstacle militating against sustainable development of telecom industry in the country.

    Adewolu Adeleke, the Executive Commissioner, Stakeholder Management of the NCC, stated this at the Regional Stakeholders Workshop on Multiple Taxation and Regulations, on Wednesday in Kano.

    The theme of the conference is: “Navigating the Landscape of Multiple Taxation and Regulations, Fostering Sustainable Growth through Collaboration”.

    Represented by Efosa Idehen, Director Compliance, Monitoring and Enforcement of the commission, Adeleke said multiple taxation and regulations were impacting on the growth of telecoms infrastructure on which all other infrastructure making up digital economy depended.

    “This is not referring to legitimate taxes imposed by appropriate authorities following necessary due processes, but the many irregular, often duplicated and sometimes hastily posed taxes and charges which some agencies pursue for short-term revenue gains neglecting the greater long-term impacts of their actions on investor confidence, the socio-economic wellbeing of our people and overall national economic growth,” he said.

    He said that some state and local government agencies imposed such taxes and regulations without appropriate legal backing, adding that it affected the industry’s out put in general.

    “Multiple taxation and regulations imposed on infrastructure maintenance, environmental impact charges, waste collection charges in addition to value added tax and sales tax being paid simultaneously add to the cost of services enjoyed by the consumers,” he said.

    He advocated for proactive measures to proffer lasting solution to the problem of multiple taxation and regulations.

    “I am, therefore, pleased to note that one of the most pivotal actions taken by President Bola Tinubu, upon assuming office, was the establishment of Presidential Tax Reform Committee.

    “We have presented our recommendations to the committee, and we are confident that it will make necessary recommendations to conclusively address the various dimensions of the problem of multiple taxations and regulation.

    “In our view, prioritizing comprehensive tax reform will unlock the full potential of the Nigerian economy.

    “These reforms should aim to simplify the tax system, eliminate redundancies, and promote transparency.

    “Government at all levels must collaborate to create a harmonised tax structure that foster economic growth rather than stifling it,” he said.

    The NCC Commissioner stressed the need for speedy deployment of new infrastructure and the seamless operations of existing ones to achieve 90 per cent broadband penetration by 2027 in the country.

    “To illustrate, the industry experienced over 35,000 fiber cuts in 2022 and over 24,000 fiber cuts so far in 2023. Similarly, over N14 billion has been spent on repairing damaged fiber.

    “In the same vein there has been over 18,000 denial of access cases recorded in 2022 and over 6,000 cases so far in 2023.

    “Statistics of this nature cannot encourage anyone to invest. So we all owe it a duty to tackle this menace once and for all”.

  • Over 40 bakeries shutdown in FCT over cost of production

    Over 40 bakeries shutdown in FCT over cost of production

    No fewer than 40 bakeries have closed shop in the Federal Capital Territory (FCT), over cost of production and multiple taxation and hike in electricity tariff, among others.

    Some of the bakeries visited were not opened for business due to operational cost and multiple taxation by some government agencies.

    Some of the bakeries that have closed shops are Abumme bakery Ltd. Lugbe, Airports road; Hamdala Bakery, Kuje; Harmony Bite Bakery, Karu, and Doweey Delight Bakery Ltd, Kubwa.

    Others include Merit Baker, Mpape; Funez Baker, Orozo; Slyz Bakery, Wuse Zone 2, and others.

    Mr Ishaq Abdulraheem, the Chairman, Abuja Master Bakers, FCT said that it was becoming increasingly disturbing that bakeries in Abuja could no longer cope with the high cost of production.

    He said that most members had lost their means of livelihood, while workers had been out of job due to the shutdown.

    He called on the Federal Government to quickly intervene and check agencies of government frustrating bakery business.

    He identified some of the agencies to include the National Food Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), National Environmental Standards and Regulations, and Enforcement Agency (NESREA).

    He said that the six Area Councils in FCT had also made business very unpleasant and difficult for bakeries with huge taxes and tenement rates.

    An Abuja baker, Mr Nuhu Musa of Hamdala Bakery, Kuje, FCT appealed to the government to regulate the activities of these agencies to reduce the different taxes they imposed on bakers.

    Musa said many bakeries were struggling to survive due to the high cost of production.

    “We want government to regulate these agencies so that our production process will be easy.

    “These taxations are negatively impacting our business to the extent that many of us have closed down.

    “This is also affecting employment as many bakery workers are out of work presently and you know the effect of that on the society; some will turn to criminality,’’ he said.

    Musa said, for instance, NAFDAC will come to their bakeries to check for certificates, while SON will come for the registration of the product.

    “How much are we making to warrant all these checking and payments,’’ he said.

    Some of the Abuja residents who spoke with NAN decried the high cost of bread in the market, stressing that bread was gradually becoming the food for the rich.

    Mr Julius Anthony, a resident said that some of the bread he usually bought for N500 per loaf now cost as much as N1,000.

    Miss Aisha Danjuma,  another resident of FCT called on the government to immediately intervene over the high cost of bread, adding that “bread is the food for the masses and must not be taken away from them.’’

  • IMF cautions CBN over loan policy, multiple exchange rate

    The International Monetary Fund (IMF) on Wednesday cautioned the Central Bank of Nigeria (CBN) over risks associated with the new loan policy requiring banks to lend at least 65 per cent of their deposits or be sanctioned.

    The Fund also raised concerns over the implementation of multiple exchange rates by the apex bank, urging the regulator to move towards a uniformed market-determined exchange rate.

    Led by Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, the IMF team gave this position at the end of its visit to Lagos and Abuja between September 25 and October 7.

    The team, which discussed recent economic and financial developments, said banking sector prudential ratios were improving.

    It, however, said new regulations to spur lending should be carefully assessed and may need to be revisited, in view of the potential unintended consequences on banks’ asset quality, maturity structure, prudential buffers and the inflation target.

    The IMF team said: “Managing vulnerabilities arising from large amounts of maturing Central Bank of Nigeria (CBN) bills—including those held by non-residents – requires stopping direct central bank interventions, the introduction of longer-term government instruments to mop up excess liquidity and moving towards a uniform market-determined exchange rate.

    “Continued strengthening of banks’ capital buffers would enhance banking sector resilience. Structural reforms, particularly on governance and corruption and in implementing the much-delayed power sector recovery plan, remain essential to boosting prospects for higher and more inclusive growth.”

    The team said it held productive discussions with senior government and central bank officials.

    “It also met with representatives of the banking system, the private sector, and international development partners. The team wishes to thank the authorities and all those it met for the productive discussions, excellent cooperation, and warm hospitality,” it said.

    According to the Fund, Nigeria’s slow economic recovery is continuing, inflation is falling, and external buffers are declining in the face of increased portfolio outflows.

    The team said: “The pace of economic recovery remains slow, as depressed private consumption and investors’ wait-and-see attitude kept growth in the first half of the year at two per cent, a rate significantly below population growth. Headline inflation has fallen, reaching its lowest level since January 2016, helped by lower food price.

    “Spurred by one-off increases in imports, the current account turned into a deficit in the first half of 2019 after three years of surpluses. Gross international reserves have fallen to below $42 billion at end-August 2019, mainly reflecting a decline in foreign holdings of short-term securities and equity. The exchange rate in various windows remained stable, helped by steady sales of foreign exchange by the Central Bank of Nigeria (CBN).

    The team added that the carryover from 2018 to 2019 increased public investment spending in the first half of the year, but revenue underperformed significantly relative to the budget target in the first half of 2019.

    “Over-optimistic revenue projections have led to higher financing needs than initially envisaged, resulting in over-reliance on expensive borrowing from the CBN to finance the fiscal deficit.

    “The Federal Government interest payments continue to absorb more than half of revenues in 2019. The outlook under current policies remains challenging. Growth is expected to pick up to 2.3 percent this year on the strength of a continuing recovery in the oil sector and the regaining of momentum in agriculture following a good harvest.” According to the IMF team, revenue initiatives planned under the 2020 budget—including a VAT reform that increases the rate, introduces a minimum registration threshold and exempts basic food products- will help partially offset declining oil revenues and the impact of higher minimum wages, thus keeping the overall consolidated fiscal deficit elevated.

    “The current account’s shift to a deficit is expected to persist while the pace of capital outflows continues to weigh on international reserves. Inflation will likely pick up in 2020 following rising minimum wages and a higher VAT rate, despite a tight monetary policy.

    “A comprehensive package of measures—whose design and implementation will require close coordination within the economic team and the newly-appointed Economic Advisory Council—is urgently needed to reduce vulnerabilities and raise growth.

    “The increasing CBN financing of the government reinforces the need for an ambitious revenue-based fiscal consolidation that should build on the initiatives laid out in the Strategic Revenue Growth Initiative. A tight monetary policy should be maintained through more conventional tools.”

    Reacting to the report, spokesman for the Minister of Finance Budget and National Planning Yunusa Tanko Abdullahi, said: “overall, the report is good because it acknowledged the effort of government in improving the economy through transparency and inclusiveness.”

    According Tanko Abdullahi, “the IMF team acknowledged the ‘decreasing inflation rate’ which has continued for nine consecutive quarters. The report also emphasized that ” growth is expected to pick up to 2.3% this year on the strength of a continuing recovery in the oil sector and the regaining momentum in agriculture following a good harvest.”

  • Nigeria’s economy dying from multiple taxation, infrastructure deficit – LCCI

    Nigeria’s economy dying from multiple taxation, infrastructure deficit – LCCI

    The Director of Research and Advocacy of the Lagos Chamber of Commerce and Industry (LCCI), Dr Vincent Nwani, stated on Wednesday that multiple taxation and infrastructure deficits were harming the nation’s economy.

    Nwani, an economist, made the observation in a paper entitled: “Regulations Undoing Diversification of the Economy” at the Breakfast Policy Dialogue, organised by the Initiative for Public Policy Analysis (IPPA) in Lagos.

    IPPA is a public policy think-tank.

    The News Agency of Nigeria (NAN) reports that the theme of the event is: “Moving from Regulations to Policy Action–the Challenges’’.

    “So many policies in Nigeria are hindering the nation’s drive for diversification.

    “In all indicators, ease of getting credit, electricity, registering a business, resolving disputes, exporting and importing among others are challenges and we are not doing well at all.

    “A lot of people are not doing business in Nigeria because of security and so many businesses have closed down because of insecurity.

    In terms of stability of laws and inconsistency of law, we are also ranked very low: 181 out of 191 countries.

    “On infrastructure, whether it is power, road or rail, we are also one of the worst in the world. Our index is 177 out of 190 countries.

    “And on economic competitiveness, we are 124 out of 140 from the World Economy Forum.’’

    According to Nwani “from everything we look at, we are not doing well even though we are the largest country by population in Africa.

    “I can tell you, regulation is the problem. Multiplicity of regulations, taxes and reforms are issues.

    “There are some sectors we count up to about 80 different types of taxes, especially in oil and gas and manufacturing and this is why a lot of businesses are moving from formal to businesses that are invisible.’’

    Speaking on the nation’s ports, the economist said that multiplicity of agencies, cargo clearance bottlenecks and other delays were causing serious problems at the ports.

    According to him, due to these factors, some of cargoes that should land in Nigerian ports often head to other countries.

    Also speaking, a member of the House of Representatives, Hon. Olubunmi Odebunmi, said that the economy was picking up and that the Federal Government was working hard to prevent job losses.

    Odebunmi, the Chairman of the House Committee on Information, who was represented by his aide, Mr Al-Marruf Ajibolu, said that government was also tackling the problems of poor infrastructure and epileptic power supply.

    The Executive Director of IPPA, Mr Thompson Ayodele, told NAN that the body was promoting advocacy to ensure that businesses were not killed through legislation.

    “What can be done is to see other ways by which businesses can be regulated and make them more responsible to the society.

    “If we close businesses with legislations, we tend to see smugglers filling up the vacuum and even the regulators will not have control over it again.

    “So, instead of sniffing life out of existing manufacturers, why can’t we explore ways in which we can make them more responsible?’’

     

     

    NAN

  • Multiple taxation responsible for abysmal performance of domestic airlines – Operators

    Multiple taxation responsible for abysmal performance of domestic airlines – Operators

    The Airline Operators of Nigeria (AON) has blamed the poor performance of domestic airlines on multiple taxation by various agencies in the aviation sector.

    Capt. Nogie Meggisson, Chairman, AON, made the claim on Sunday in Lagos while reacting to the takeover of Arik Air and Aero Contractors by the Asset Management Company of Nigeria (AMCON).

    TheNewsGuru.com reports that the aviation agencies include the Nigerian Civil Aviation Authority (NCAA), Nigerian Airspace Management Agency (NAMA) and the Accident Investigation Bureau (AIB).

    Others are the Federal Airports Authority of Nigeria (FAAN), the Nigerian Meteorological Agency (NiMet) and the Nigerian College of Aviation Technology (NCAT),Zaria.

    Meggisson said it was unfortunate that the system had failed to recognise the pivotal role airlines could play in bringing the Nigerian economy out of recession.

    “Rather, the system is continuously manipulating, feasting and pushing the financial envelope of airlines by inflicting multiple taxes and levies to the extent that airlines are now groaning under the pressure and some are going bankrupt.

    “AON has been screaming and complaining about the same issue over the years that have culminated in sending over 27 airlines under in the past 25 years.

    “A case in point is the recent takeover of Arik Air and Aero Contractors by AMCON in the face of huge financial burdens that have shown themselves as fallout of the multiple and sometimes unfair charges and taxes airlines are forced to grapple with on a daily basis.

    “This is without recourse to the fact that aside from all the multiple charges, levies and fees, airlines still have to pay mandatory statutory corporate taxes to relevant agencies.”

    According to him, airlines meet so many costly foreign exchange components on daily basis that accounts for 70 to 80 per cent of their direct operational cost such as jet fuel, spare parts, insurance and simulator training among several others.

    He said inspite of all these challenges , the agencies continue to overburden the airlines with multiple taxes and levies which further puts strain on their operations and finances.

    “The Civil Aviation Act of 2006 (Part 18.12.3) requires that the NCAA regulates civil aviation and the charges imposed by civil aviation authorities and/or agencies.

    “These charges, in consultation with stakeholders,are to be approved and reviewed periodically by both parties.

    “On the contrary however, airlines are saddled with charges without any form of consultation whatsoever.

    “Domestic airlines, on the average, pay about 35 per cent to 40 per cent of a ticket cost as taxes and charges that come under the guise of statutory levies in addition to other charges.

    “These include 5 per cent Ticket Sales Charge, 5 per cent Cargo Sales Charge, 5 per cent Value Added Tax (VAT), Passenger Service Charge, Charter Sales Charge, Aircraft Inspection Fees, Simulator Inspection Fees, Landing Charges and Parking Charges

    Others are Terminal Navigational Charge, Enroute Charge, Fuel Surcharge, Airport Space Rent, Electricity Charges, and Apron Pass, Ramp Access Charges, ODC and a newly imposed Registration Fee all of which are paid to government agencies.

    “Many of these taxes and charges amount to double taxation such that any incentive seemingly provided by government to airlines is taken back by the agencies,” Meggisson said.

    He added that even with all these charges, many of the airports in the country do not have runway lights and navigational landing aids which meant such airports are only open between 7am and 6pm daily.

    The AON chairman said :” To this end, airlines can’t fully utilise their airplanes for 24-hours operations. No airplane or factory machine can be profitable only from 7 a.m. to 6 p.m. daylight operations.

    “Airplanes and factory machines are supposed to operate for 24-hours.

    “Airlines also sometimes have to pay arbitrary extension fees or cancel a flight entirely with the attendant burden and inconvenience due to no fault of theirs.”

    Meggisson, therefore called for a total harmonisation of all agencies’charges into a one-stop shop payment system which was recently proposed by a committee set up by government and supported by the airlines.

    According to him, this will help in streamlining of all fees and charges by the various government agencies into a single window and remove any confusion and double billing.

    He called for the provision of airfield lighting and navigational landing aids at all airports in Nigeria to reduce delays and cancellations and allow for 24-hours operation and better utilisation of airplanes.

    The AON chairman also appealed to the government to extend tax holidays for the first 10 years for qualifying airlines in order to cushion the impact of start-up to ensure the survival and growth of domestic airlines.

    “Airlines provide a critical socio-economic services and should not be treated as a cash cow and strangled out of existence by multiple taxes, levies and charges that are sometimes forced on the airlines without due consultations.

    “We believe that government needs to reappraise the way it sees air transportation and accord it the support it truly deserves as done in other climes,” Meggison said.