Elumelu tasks FG on favourable tax policies
Chairman, Heirs Holdings, and Founder, Tony Elumelu Foundation (TEF), Tony O. Elumelu, has called for far-reaching tax reforms, while urging the National Assembly to urgently pass the Executive Tax Bill into law.
Elumelu made the call during his keynote address at the 21st Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN), titled, “National Development: Unlocking the Potentials of Taxation.”
To underscore the challenges that stifle small businesses, Elumelu quoted a young entrepreneur beneficiary of the Tony Elumelu Foundation, “The average business owner in Nigeria is a local government authority on his own because he caters for his own electricity with generators. He builds his own borehole, handles his own waste disposal, and the government can make his life easier by creating favourable tax policies that support SMEs.”
Elumelu also decried the plight of SMEs at the mercy of the tax system, saying: “The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other sub-Saharan countries. In Hong Kong, it’s just three. Multiple taxes remain a significant burden for SMEs and corporates operating in the country.
“With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system,” he said.
He equally tasked the government to increase the number of double tax treaties between host countries and Nigeria. “Nigeria has 14 taxation treaties, while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign Tax treaties with our top 100 trading partners in the world.”
Speaking as the leading proponent of entrepreneurship in Africa, and an advocate for entrepreneurs, Elumelu charged government to put in place tax systems to encourage SMEs, which he described as the engine for job creation in the economy.
“Until there is a reduction in what SMEs pay as tax, elimination of multiple taxes, abolition of minimum income tax, and excess dividend tax, it will be difficult for us to expand the tax base. It will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country.”
It will be difficult for us to have the citizens hold leaders accountable.”
Commenting on the presentation, a former CITN President, Chief Mark Anthony Dike, emphasized the urgency for the Executive Tax Bill to be passed into law.
He said: “Every year during the military regime, there was a Finance Miscellaneous Provision Decree aimed at looking at what has happened and review the areas that need to be amended. As they say, the taste of the pudding is in the eating. We may conceptualise, but in order to know the efficacy of a theory, we have to test it. Until the provision of the Executive order is tested, we cannot know how efficacious it will be.”