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Inter-state businesses are not spared either as movement of goods in lorries, trucks or pick-up vans from one state to another are often subjected to all manners of taxes and levies along the route.

Globally, the growth of any economy is best reflected in a prosperous real sector and when the reverse seems the case, like in Nigeria, the entire economy suffers.

This scenario was apparently depicted by the recent Fitch report, where the global rating agency scored the economy low in performance, citing the unfriendly investment climate, poor fiscal management, poor infrastructure, and corruption as some of the reasons.

The survey, which placed Nigeria as 127 out of 133 countries of the world, and 25 out of 35 African countries covered, had been raising dust in the country especially within the business community. Small and poor African countries like Ethiopia, Rwanda, The Gambia, Benin Republic, Botswana, Cameroon, Tanzania and Swaziland, had a better placement than Nigeria, which prides itself as the giant of Africa. Fitch had earlier downgraded Nigeria from a previous B+ ranking to BB- ranking.

The World Bank's Doing Business Index(DBI) similarly decried the investment and regulatory environment in Nigeria, placing the country a distant 125th among over 130 countries. These rankings tell a lot about the poor state of the economy, dearth of basic infrastructure, insecurity, the prevalent poverty, and increasing unemployment rate, which can all be linked to the absence of a vibrant manufacturing sector and thriving businesses.

The stunted growth of the economy has often been blamed on many factors, top of which is the challenge of unco-ordinated tax administration that has crippled production capacity of the manufacturing sector. The sector's contribution to the Gross Domestic Product(GDP) declined significantly from 9.5 per cent in 1975 to 6.65 per cent in 1995, 3.42 per cent in 2005 and in 2009 it peaked marginally to stand at 4.0 per cent with no sign of improvement by the end of 2010.

According to estimates from the Manufacturers Association of Nigeria (MAN) about 1,000 manufacturing firms that set out to do business in the country annually end up shutting down due to the unfriendly business environment. Their closure means thousands are sent back to the labour market. It means more able-bodied men and women hitherto employed resorting to self-help in crime, armed robbery, advanced fee fraud, drug trafficking etc. And these vices add no value to the society and the economy at large.

MAN said , aside the problem of infrastructure like unstable electricity, the yoke of multiple taxes on manufacturers ranked second among the factors stunting the growth of the real sector. It is a heavy yoke that frustrates existing investors, and scares away prospective ones. How Nigeria hopes to grow the economy under this yoke and meet its vision 20-20-20 target of getting enlisted as one of the top 20 economies globally continues to top discussions among economic analysts.

A draft of a study conducted by the manufacturers, in collaboration with the Washington, United States-based Center for International Private Enterprise, has a number of revelations on the actual extent of the burden of multiple taxation on businesses operating in Nigeria.

According to the draft, whose actual report was scheduled for inauguration in next month, the Nigerian business environment is being suffocated by too many taxes from the federal, state and local governments.

Although the report is based on a pilot scheme conducted on the burden of multiple taxes on businesses in three selected states, including Lagos, Oyo and Ogun in South-West Nigeria, the report will be significant for a preliminary gauging of the impact of taxation on the Nigerian business environment in view of the position of the three states as the hub of manufacturing activities in the country.

But it is not only the big manufacturers or multinationals that are affected. Small and medium-scale businesses and even artisans are equally affected. Indeed, an indigenous restaurant operator, barber or a hairdresser who has to pay multiple taxes to the various tiers of government in addition to the cost of powering his business via generators, and paying staff salaries will find it an Herculean task making profit to keep his business afloat because of high overhead incurred.

What then is the incentive for him if profits are eroded by overheads? What consolation when the taxes paid - legitimate and illegitimate - are not deployed for set purposes and objectives? What motivation for tax payers when the state of infrastructure keeps decaying despite taxes and levies collected by government? It is a trend that worries all stakeholders, and necessitating a change.

Jide Mike, the Director-General of MAN, said about 154 taxes had identified in the country, and expressed doubt whether these multiple taxes could attract serious investors into the county. 'We have documented the various kinds of taxes we have in this country and there are over 154 taxes, charges and levies being demanded from manufacturers or business owners by the various tiers of government,' said Mike.

'If you have so many taxes, they make doing business very costly. Your cost of production is high and you definitely can't compete. In fact, too many taxes are driving many investors away, it is also scaring away prospective investors. Who really wants to invest in this type of environment?' Mike queried.

Rasaq Adekunle, President of the Chartered Institute of Taxation of Nigeria (CITN), described these taxes as 'extortions', saying that it is most prevalent in the local government councils.

'We are not unaware that a situation exists where virtually all the local governments in the country are charging arbitrary taxes which are not in consonance with the law,' he said. But more worrisome is the manner of enforcement or collection of these multiple taxes, especially where business concerns are shut down without prior notice and rendered helpless over taxes that are not covered by the law.

It is a trend that acts as a great disincentive to the growth of the economy that is grappling with poverty and unemployment and desirous of attracting private investments to change its fortune. On his part, Simon Okolo, National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), views the taxes as a display of lawlessness that posses a great threat to the survival of businesses since government lacks the ability to coordinate the tax collection system.

'The incidence of uncoordinated tax administration is reported to be on the increase from year to year with the introduction of new taxes/levies all the time by various tiers of government,' said Okolo in an exclusive interview with Daily Sun. 'Currently, there is a consensus among business people in Nigeria that tax environment are increasingly getting unfriendly and becoming a disincentive to business. This development threatens the laudable efforts of our members to make further substantial investment on their respective networks and provide world class services in Nigeria,' he added.

Okolo noted that the refusal of members to pay these taxes is often met with violence as the affected states and local government resort to closure of their factories. Said he: 'Unfortunately and contrary to all known norms, these local governments utilize the services of the police and thugs to drive their demand, making it difficult and most times impossible to engage them meaningfully.' Okolo demanded for codification of taxes, a situation whereby all taxes as well as levies and rates collectible at the state are streamlined to avoid duplication.

'There is need to document all the various charges within a state so that we can ensure that within a jurisdiction, we will be able to determine the number of levies that are chargeable,' he said.

'But we need to know that no matter what taxes you collect, the law is very clear and it is illegal to mount road blocks for the purpose of collecting taxes or levies. Even if the levies are justified and the mechanism for collecting them is flawed, automatically that tax itself become illegal. So there is need for us to reinforce that massage,' he added.

He was supported by Mike who said that 'there should be a way of harmonizing the various taxes in the country.' 'We have submitted various memoranda, we have participated in various fora, but the state governments have a way of wriggling themselves out of the accusation of pestering investors with various forms of taxations. They would always say that theirs are not taxes but charges for services render. Having paid your corporate tax, pay your employee pay-as-you-earn (PAYE) and if there are services that one has to pay for, I think they should put some human face to it.'

To stem the problem in Lagos State, MAN recommended the following, which can as well serve as a template in other states: 'Government should direct all revenue agents and officials of government agencies to desist from its arm twisting approaches to revenue collection; enlighten its revenue agents and officials on the legal implications of closing factories without a court order or any formal trial; always consider the overall impact of tax policies and laws on the economy of the state and the image of government; harmonize and publish list of collectable taxes for easy, acceptable and prompt collection and restrain its agencies from collecting taxes or levies outside the harmonized list.

'Government should also enlighten the public on the rationale for some tax heads. For instance, asking those who demand explanation on the rationale for such taxes and levies to pay or relocate from Lagos is not customer service; government should put in place a tax regime that guarantees a low cost environment and promote entrepreneurship and job creation.'

MAN also suggested that 'the government should aggressively pursue the public private partnership option in funding its lofty developmental programs. To attract private sector partners and investors, states should create a business and investment friendly climate.'

According to the Managing Director of Saro Lifecare Limited , maker of Carat Medical soap, Mr. Oluwole Adeyegbe, multiple taxation undermines the quest for economic transformation. 'The problem of multiple taxation has become so bad that it is actually pushing manufacturers to leave Nigeria and to relocate elsewhere,' Adeyegbe said. 'This problem is pushing organizations to retrench staff because of the high cost of doing business, and I have to state that it is one factor that is discouraging inter-state commercial businesses.'

As a way of reducing the burden of multiple taxation, he called on the Federal government to review the constitution of the country to spell out correctly the tax powers of each tiers of government. In the interim, he wants all state governments to publish the list of approved or authorized taxes and local governments to educate the public and reduce the number of effective taxes. The Managing Director of International Packaging Industries of Nigeria Plc, Mrs.Essien-Akpan, said taxes should be based on statistical analysis and the financial records of the organization as at the time tax payment notification is brought.

In an interview with Daily Sun she said the tax environment in Nigeria was a clear departure from what obtains in other parts of the globe. 'I have no problem paying my tax, because I am a law abiding citizen. The problem I have with government is when they make the tax arbitrary,' she said, lamenting the proliferation of the tax collection process by the local, state and federal governments. 'At every level, taxes are paid on an incremental basis into the coffers of different government or agencies for the same purpose, Essin-Akpan noted.

'Tax officers in some instances, come up with inflated figures, which they now expect to be negotiated. This remains a worrisome development in the tax collection process. 'The officers in question sometimes bring payment notification for items like; Radio and television taxes without knowing whether the items are actually existing in the organization. 'I understand that government is trying everything possible to raise its revenue base for some of its projects, but it is important that you access organizations properly and fairly. Because if they fail to do this, organizations and individuals will not feel obliged to pay,' she said.

She, therefore, advocated for a decentralization process of the tax collection system in order to determine which agency or particular tier of government collects specific rates and taxes. Essien- Akpan also called for quality motivation in the areas of welfare and better remuneration to discourage workers from colluding with organizations for downward review of their respective taxes. Tunde Fowler, the chairman of the Lagos Inland Revenue Service(LIRS), however, disagrees that the problem of multiple taxation was at the root of manufacturers' plight.

According to him, 'there is no double taxation or multiple taxation as people claim it to be. Now, the Federal laws that govern tax administration in Nigeria has divided government and their taxing powers into three: federal, state and local governments. 'People who have laid claims to be victims of double taxation are not really saying it the way it is because when we investigated some of these claims in the past, we found out that what they call taxes are sometimes penalties, levies or user charges. And in some cases, they are charges that their own unions or associations charge them but not government.

'We also find out that there are some criminal elements, maybe not so much in Lagos anymore but in some other states, that will form themselves into revenue agencies and start collecting taxes from individuals and small businessmen,' Fowler said. According to him, individuals and organization had the right to fight back and to report such abuses to relevant government agencies for sanction.