NBCC laments multiplicity of taxes in real estate sector
Nigerian British-Chamber of Commerce (NBCC) has decried the multiplicity of taxes in Lagos State, describing it as a mere revenue generator compounding the woes of many business entities.
The Deputy President, Nigerian Chamber of Commerce (NBCC), Akin Olawore during its Construction and Real Estate Groups seminar themed “Navigating Tax Issues in Real Estate Transactions” and held on Tuesday in Lagos, complained about the multiplicity of taxes for the real estate sector.
He accused the Lagos state government of charging tax on properties and not caring if the money was borrowed to buy the properties.
He said “contrary to what the constitution said, what will happen if we have a different party in power, and I know more states are beginning to copy it. For instance, you are being charged for development levy when working on your building plans. What is development levy supposed to take care of? What is impact of the land use charge? what does it really mean?”
Olawore said taxing rate income at the entity level and taxing same at the distribution level is putting the real estate and constructing companies in the worst position.
He said “taxation is not being used as a fiscal tool to direct development but rather it is being used as a revenue generator tool which is not very good because the state government will end up taxing businesses to death and tomorrow you will not be able to get that tax from them.
“Companies will start reducing their staff strength because of tax and companies will not make profit which will result to people who may not want to pay tax again and they will still make money.”
The chairman of construction and real estate group of NBCC, Hakeem Ogunniran said most people don’t pay attention to tax when planning their projects, so they are usually caught unaware.
He stated that at the end of this year, the new penalty regime is coming in to effect and FIRS has announced that is going to be 15% MPR plus 5% interest in addition to the penalty that is paid for unpaid taxes.
He asked the government to emulate countries like Kenya, Nairobi and others who pay attention to the environment in which real estate companies are operating in other to attract global investors yearly.
The keynote speaker of the event, Taiwo Oyedele, represented by Moshood Olajide, an Associate Director at PwC, speaks on tax issues in real estate transaction; explaining tax as an event driven activity means if people are not doing anything, they are not expected to pay tax.
He added that issues bordering on multiplicity of taxes are being addressed by the Federal Government.
No comments yet