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Home Economy/Technology

Multiple taxations irks business owners, traders

Taxations

The Matters Press by The Matters Press
January 22, 2023
Reading Time: 5 mins read
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2020 Finance Bill prescribes tax incentives

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Mr Olufemi Ogundare, the Director General, Ondo State Chamber of Commerce, Industry, Mines and Agriculture, has described multiple taxation as a clog in the wheel of businesses in the state.

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Ogundare said that multiple taxes have adverse effects on financial transactions of business owners in the state.

“Areas of concern of the local government should be clearly defined while that of the Ministry of Commerce and others in that category should also be known.

“Also, the areas that concern the state Board of Internal Revenue should be demarcated because all of them are imposing all forms of taxes in the same business location. All these should be avoided,” he said

The director general also urged the state government to consider inputs of the Chamber of Commerce and Industry before any imposition of taxes.

He disclosed that the body has decided to forward a position paper to the government on its grievances against multiple taxation in the state

Also, Mr Olusegun Ajani, a haulage transporter in Okitipupa, decried multiple taxations.

He said that the haulage business was booming until the advent of multiple taxation by the federal, states and local government agencies and personnel across various states.

Ajani said that multiple taxes were inimical to business development and sustainability.

“Everyone is just showing their power by collecting tax without any assurance that the taxes are getting to government coffers,’’ the transporter said.

He, therefore, called on the Federal Government to wade into the situation “as many transporters are out business because of the unregulated taxation.

” The unregulated taxation is inimical to our business growth and it is seriously affecting the cost of doing business in the country right now as well as affecting economic development of the nation

“Poverty will continue to grow in the country because of multiple taxes as many of our colleagues are out of businesses now, and we, still in the business , are just managing.

“We are appealing to the Federal Government to wade into this matter in order to regulate the tax we are paying and to fish out unscrupulous elements sabotaging the economic development of the country,” Ajani said.

Reacting to allegations of multiple taxation in the state, the government denied this, saying it has implemented the recommendation of the Joint Tax Board (JTB) based on the provisions of the Personal Income Tax Law of 2004, which has harmonised all taxes in Nigeria.

The Chairman, Ondo State Internal Revenue Service (ODIRS), Mr Tolu Adegbie, said that the government had stopped multiple taxes and fees on transport vehicles by introducing special mobile advert stickers as recommended by the JTB.

Adegbie disclosed that the state hitherto had up to 15 different taxes for commercial vehicles, “but we have now streamlined these to just one while the cost has also been reduced from over N15000 to N3,500 ‘’

He said that the provisions of the joint tax law was that once payment had been made for mobile advert in one state, it covers for the whole country, adding that this would put an end to delay and harassment by revenue officers of transporters because of the QR code feature of the stickers.

Also, transporters and business owners in Osun have expressed displeasure over what they described as forceful payment of multiple taxes by agents of governments and officials of transport unions in and outside the state.

They said after payment of taxes and levies to the state government, they usually pay the same taxes and levies whenever they travel outside the state.

Mr Adepoju Ruben, a truck driver and member Allied Trucks Transporters Association of Nigeria, said multiple taxation being paid by members of the association within and outside the state was a disturbing issue.

Ruben said that after payment of necessary taxes in Osun and he travel to other states to deliver goods, government officials in such places still forcefully demand payment of the same taxes.

“There was a time I transported some items to Ondo State and I was made to pay N3,500 for Niger Delta Permit, which I had already paid for in Osun.

“The tax people claimed that what I had was fake (the one Osun issued) and that their own was the original because they were the real Niger Delta people”, he said.

Ruben also alleged that the Osun state government in 2022 introduced a new levy called Economic Development Levy (EDL), which cost N7,500, aside other levies and taxes.

According to him, in total, members of the association now pay 31 different levies and taxes, ranging from road tax , local government levy, vehicle emission test, auto trade permit, driver/conductor badge, among others.

He said they also pay for waste basket, which is pegged at N4,000, aside operational levies and taxes

Ruben, however, called for the harmonisation of all the levies and taxes nationwide to avoid multiple taxation within and outside the state

Also, the Chairman of Amalgamated Commercial Tricycle and Motorcycle Owners, Repairers and Riders Association in Ile-Ife, Mr Peter Omisode, said the issue multiple taxation was affecting their operations as well.

Omisode said that commercial motorcycle operators paid levies and taxes to both the state and local governments, adding that it was the local government that issued hackney permits to its members before,“ but now the state also issue the permit.”

He appealed to the state government to harmonise the levies for the benefit of the masses.

Meanwhile, the state government said that the taxes collected in the state are in conformity with the harmonised tax agreed by the Joint Tax Board.

Mrs Arogundade Adesola, an Assistant Tax Director with the Osun Internal Revenue Service (OIRS), said before setting up any form of business in the state, there was need for investors in such business to visit any of the tax offices in the state to get details of what tax to be paid.

She said details of taxes payable and collected by the state government were listed on the Osun Internal Revenue Service website (Oirs.ng).

Similarly, experts in the financial sector in Ekiti have condemned arbitrary taxation by different levels of government, but acknowledged that taxes were necessary for any government to provide social amenities for the citizens.

They urged taxable Nigerians to fulfill their civic obligations, including prompt payment of taxes, so that government could have enough revenue to fund its development projects.

A financial expert, Dr Sola Omoniyi, said creation of awareness about tax payment should be a priority of those concerned to enable citizens and entrepreneurs know they are not being extorted.

According to him, government needs to make tax affordable, rather than make it difficult or suspicious for the citizens to pay.

Also, an Economist, Mr Wale Olaofe, said in recent time, Nigeria had made the economic mistake of diverting too speedily to tax revenue, due to fall in the price of crude oil.

He said that this was notwithstanding the fact that about 80 per cent of the country’s labour force was from the informal sector, like artisans, petty traders etc.

“But government has done much harm to these petty businesses that people used their hard earned money to set up, through unwarranted double taxes”, he said

According to him, it is a bad to impose multiple taxes on this category of entrepreneurs because it is the duty of government to support businesses to grow, rather than kill them through unexplained taxes.

“I wonder why government places too much burden on them as taxes, thereby paralysing a lot of such businesses in the country,’’ Olaofe said.

Also, Mr Gboyega Babajide, an accountant, said that high taxation costs would always have significant negative implications for Nigerian businesses.

He said that such a practice would reduce incentives to expand production and lead to higher prices, and distortion of factor incomes.

He said as firms take investment decisions, based on long-term returns to capital, the costs of multiple taxation reduce the size of the capital stock, and aggregate output in the economy by discouraging investment in productivity.

A foodstuffs seller in Ikole-Ekiti, Mrs Foluke Oluwalana, said the multiple taxes and dues, placed on raw food sellers by local government council and state government were becoming unbearable for her.

Oluwalana stated that within a year, she paid offloading permit of N30,000, Board of Internal Revenue,N80,000, Signage, N5,000, Commerce and industry, N15,000 and trader’s permit, N50,000.

The trader said that often she had to increase prices of her food stuff, just to be able to recover the exorbitant dues that she has had to pay to various government agents

“When many of our buyers complain that raw foods are too expensive, I always tell them to help us beg the state and local governments to reduce multiple taxes on us

“The gains we make from these raw foodstuffs at times is not always up to N1,000, but the government revenue collectors will collect over N3,000 before the end of a month.

“The prices of raw foodstuffs will reduce if the state government can intervene and reduce multiple taxes,” she said.

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