How Multiple Taxation Hurts Our Businesses — Operators

Business entities multiple taxes burden

Multiple taxes being levied on various business entities is having an effect on operations, many Small and Medium Enterprises (SMEs) operators have complained.

Daily Trust report continues:

Some of these operators across Kwara, Kaduna, Nasarawa states and the Federal Capital Territory (FCT) said an average of 20 per cent and more of their gross earnings went for taxes payment monthly. This situation they said was not favourable to the growth of their businesses and it hindered their expansion and investment plans.

The Director, Perfectwork Ventures Limited, an aluminium assemblage firm in Kaduna, Mr Ejiga Enoch, said his business was being taxed by over five entities in Kaduna Metropolis. 

He said, “I pay taxes to Kaduna North Local Government; there is that of Environmental Health, there is Joint Tax Board (JTB), an arm of the Federal Inland Revenue Services (FIRS).

“I also pay local security tax, market association tax and more. We even pay for sticker or signpost permit. These taxes are numerous that they threaten the existence of our businesses. Most often, failure to pay attracts the enforcer’s wrath as they will want to lock up the place,” he explained.

In Mararaba part of Nasarawa State, our reporters observed that stickers of the state revenue service were being placed on all business shops. 

One of the SMEs operators in the area, Mr Chukwudi Obi, who owns a chain of retail stores, said he was asked to pay from ₦10,000 above for his various shops, depending on the size.

“This is separate from what I pay when the JTB come to check for Value Added Tax (VAT) and withholding tax remittances. It is also separate from the local vigilante group tax that we have to pay,” he lamented.

Another business owner in Nyanya, a suburb of the FCT, Mr. Collins Udeh, called for the centralization of tax payment for SMEs to reduce the case of multiple taxation coming mostly from frivolous entities. 

He said: “Government at federal, state and local government levels should endeavour to harmonize the payments and help to reduce the taxes optimally.”

Mrs. Latifat Balogun is the CEO of Hatlab place, Abuja. In the past months, she has paid different taxes in different guises. 

“The Federal Capital Territory is collecting one; Abuja Municipal Area Council (AMAC) is charging another one. Sometimes, the FCT will call it business premises charges, while AMAC will call it petty licensing for businesses and shops. We have things like tenement rates. This has increased our operational expenses,” Balogun says.

The Chief Revenue Officer of Abuja Municipal Area Council (AMAC), Chief Danlami Awaje, said there was nothing like multi taxation in the area council.

He said the area council taxes were carried in relation to the provision of the council’s bye laws.

“Generally, whatever business you are doing aside the taxes paid to regulatory agencies for operating a business in the domain of AMAC, you have a duty to pay operational permit regardless of the business,” Awaje said.

“Every charge we bring to any organisation is backed up by our bye-law and any business owner that has issues with us, when he comes here we clarify the issue. If you operate your business within AMAC you have a duty to pay us taxes for that.

“I agree that there are conflicting roles that are taking place between agencies of FCTA and the AMAC because there are some places that you find public health going to ask for money, by constitution it is our duty backed by law,” Awaje explained.

He said harmonization of the taxes was not easily possible because the demands were not coming from the same agencies.

The Director, Information and Communication at the FCT Administration, Stella Ojeme said the board of FCT Internal Revenue Services recently constituted by President Muhammadu Buhari was yet to be inaugurated because the chairman had not been confirmed by the National Assembly.

She said harmonizing taxes in the territory would be enhanced with the passage of a bill before the National Assembly.  The bill, when passed would harmonize several taxes collected by the FCT Administration and area councils including tenement rates. It would also curbed what some stakeholders termed multiple taxation.  

Recently, in Kwara state, the Manufacturers Association of Nigeria (MAN) kicked against a proposed manufacturing levy bill sent to the House of Assembly by the state government. They said it was constituting multiple taxation capable of killing businesses in the state.

They faulted the consumption tax bill during a public hearing which government said would drive revenue generation target of the state.

Chairman of the state chapter of MAN, Pharmacist Bioku Rahman, said the Manufacturing Processing Levy Bill must not be passed into law because they did not understand the objectives. They said there were already other taxes that manufacturers paid in the state.

He said that the manufacturers paid about 32 taxes, rates and levies and argued that the bill would only constitute a further burden on them which would not help the growth of manufacturing sector in the state.

Also speaking, Chairman of the state Chamber of Commerce, Industry, Mines and Agriculture (KWACCIMA), Alhaji Ahmed Raji, said his organization was opposed to the bill because it considered it not beneficial to the development of the state.

But business owners like Balogun said government should harmonize these taxes.

“We are saying the government should look at it and harmonize all their taxes,” Balogun explains.