By Adedapo Adesanya

Nigeria is ranked among the top ten countries of the highest payers of company income tax, and this is not helping businesses reach their maximum growth capacity.

This was expressed by Mr Taiwo Oyedele, the Head of Tax and Corporate Advisory Services at PwC Nigeria at the Finance Correspondents Association of Nigeria (FICAN) annual workshop over the weekend.

Mr Oyedele, while speaking at the event themed Unlocking Opportunities in Nigeria’s Non-Oil Sector stated that, “We pay Company Income Tax (CIT) of 30 percent and education tax of 2 percent. Whatever is left, we pay withholding tax of 10 percent. If you add all these together, it is more than 40 percent already.”

“If you now make a mistake of having a group and you say it’s a holding company, another 30 percent. Who does that?” he queried.

Speaking further, he said, “When you start a business today, there is something called commencement rule. It is supposed to punish you during commencement so that you pay tax twice. It does not make sense.”

To address this challenge, the Tax Leader called on operators in the private sector to focus on demanding for the removal of some of these disincentives that affect business operations.

He then added that the government must remove tax disincentives, emphasising that, “One thing I am asking the business community is to stop asking the government for incentives because they will think they are doing you a favour.”

“Ask them to remove the disincentives that are not allowing us to do business,” he said.

Mr Oyedele also called on the authorities to change their thinking about taxation as this current approach has only made compliance difficult.

He said: “Our thinking around taxation is complete upside down as a country. Nigeria does not seem to understand that you need to be prosperous so that you can pay tax. So, the tax does not just fall from heaven.”

“As a government, I should help you make money so that you can pay me tax. It’s just common sense. Nigeria has a tax system that does not allow businesses to thrive, whether you are small or big,” he added.

He noted that “the reason Nigeria cannot make money from tax, and is not a curse, is that it continues to beat up the people at the bottom of the ladder. But they cannot give you what they don’t have.

“In societies where they think things logically, they focus on the top one percent who are the rich and big companies and they will get the desired tax result,” he said.

https://businesspost.ng/2019/09/23/why-nigeria-cant-generate-much-revenue-from-tax-oyedele/

Thank you!