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Experts call for overview of tax system in Nigeria for global competitiveness

Experts call for overview of tax system in Nigeria for global competitiveness

Tax experts in Nigeria have stressed the need for government at all levels to simplify the tax system to enhance the country’s global competitiveness.

These experts shared their insights during the 5th edition of Blakey’s national tax conference which held in Lagos under the theme: ‘The role of taxation in global competitiveness-A case study of Nigeria.’

According to the convener of the conference, Blakey Ijezie, Nigeria has a complex tax system which needs to be simplified to attract both local and foreign investors.

Explaining further, Ijezie said: “In Nigeria we have over 65 taxes, they are not necessary, taxes can be streamlined in to nine, so that companies and individuals will know what they are paying for ‘’.

Describing taxation as the backbone of economic growth and development, Ijezie said: “Our tax system must adapt to the changing landscape of international trade, finance, and technology. We must harness taxation as a tool for economic transformation, not just revenue generation’’.

Similarly, Kenneth Odusanya who spoke on: ‘Nigerian tax system and revenue mobilisation: Impediments and the challenges,’ described taxation as a monetary charge imposed by the government on persons, entities, transactions, or property to yield public revenue.

While stating that taxation is one of the important pillars upon which the whole fabric of a nation is based, Odusanya added that it is of great relevance to the prosperity of the state apart from being a social contract between the government and the citizens.

In his words: “The role of taxation in global competitiveness is a critical aspect that impacts economic growth, investment, and overall business environment.

“Government can through its taxation policies influence the response of the international community to its various initiatives.

“A tax system that is competitive will, promote sustainable economic growth and attract investments from within and without while also raising sufficient revenues for government activities.

“Taxation has a direct effect on cost of doing business in any jurisdiction and a high interest rate and multiplicity of taxations may serve as a hindrance to attracting investment into the nation.

“As at today, there are too many taxes businesses are made to pay in Nigeria, thereby increasing the cost to an average businessman. The effect of this is to reduce the attractiveness of our country for investment and hinder our search for growth and development.

“Research had shown that countries with lower corporate tax rates tend to attract more foreign direct investment, have improved savings culture and encourage business expansion. So any nation desirous of competing must be able to strike a balance.’’

On the other hand, he condemned the idea of governments granting palliatives to Nigerians instead of encouraging production.

“Nigeria is in a pathetic condition today because of the nation’s inability to find the roadmap to sustainable growth and shared prosperity despite the huge natural endowment.

“It is painful that our government at all levels have resorted to granting of what they call palliatives instead of encouraging production, this approach will not help alleviate poverty neither can it be a route to national development.

“Government needs to discontinue the current approach of issuing tokens to our citizens in form of palliative, all this is to degrade our people and make them less human, we must teach our people that there is dignity in labour,’’ he said.

On subsidy, he opined that there is nothing wrong in subsidy if it is used to encourage production.

Explaining further he said: “You can imagine what subsidising manufacturing and agriculture even if just for five continuous years will do on our economy and poverty alleviation in our nation.

“The developed countries of today were not moved from third world to developed country by mere issuance of palliatives neither did they out rightly cancel subsidy without paying attention to the need to support the critical sectors particularly during infancy.

“Our leaders need to introduce reformative changes that will promote production and redirect consumption.’’

Tunji Adeyemi who spoke on ‘Taxation and economic development, lessons from other economies of Africa,’ maintained that taxation provides the resources to finance government spending on infrastructure, education, and health care which according to him enhance productivity, and accelerate economic growth and development.

While excessive tax, he said reduces investment returns capital returns, capital formation, and Research and Development (R&D).

He however, stressed the need for the government to institute an appropriate tax system with an emphasis on broadening the tax base and in some cases, reviewing upwards the tax rates as well as ensure optimal contribution of taxation towards economic growth and development.