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Manufacturers canvass reduction of corporate taxes to attract investors

…as FIRS plans to cut taxes for MSMEs

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Manufacturers say federal and state governments should cut corporate taxes to reduce production costs borne by businesses and attract foreign investors.

“Most countries are reducing corporate taxes in an effort to encourage investors, which is what Nigeria should be doing in order to increase investment in the organised private sector,” Paul Gbededo, group managing director, Flour Mills of Nigeria, said at an interactive session between the Manufacturers Association of Nigeria (MAN) and the Federal Inland Revenue Service (FIRS) in Lagos.

Gbededo, however, added that the FIRS was making efforts to support the business environment, stating that taxes should be paid regularly in order to boost social development.

Nigeria’s taxes have risen from 37 to 54 in the last four years, according to tax experts. Manufacturers and corporate organisations contribute a lot of money in taxes, but they are also battling high production cost and low purchasing power of Nigerians.

Mansur Ahmed, MAN president, said revenue from taxes had significantly improved and fast becoming another credible source of central government’s yearly budget funding, thereby minimising the vagaries and volatility associated with oil prices at the international market.

“Government should widen the tax net rather than increasing the tax rate, thereby moving up taxes and levies, which are usually borne by the narrow tax compliant segments of the populace, especially corporate entities, majority of whom are manufacturers and whose internal system cannot permit avoidance or evasion of tax,” he said.

Segun Ajayi Kadiri, director-general, MAN, said the FIRS was a credible partner to MAN in efforts to improve the Nigerian economy. He requested that every government agency should work hand in hand with MAN to foster growth in the manufacturing sector.

Babatunde Fowler, executive chairman, FIRS, said the agency was making plans to ease the business environment for Micro, Small and Medium scale Enterprises (MSMEs). This would be done through tax reduction, tax waiver and patronage, he said.

“The FIRS follows the vice president’s team on tours relating to the ease of doing business. In addition to that, all penalties and interests dealt on unremitted taxes up to 2016 have been waived for MSMEs,” Fowler said.

He said the agency held regular meetings with MSMEs and plans were being made with the minister of finance to reduce tax rates for them.

He further disclosed that there were directives from the office of the president and the vice president to ensure that government agencies at the federal level patronised local manufacturers with 40 percent of all its expenditures.

He further said tax multiplicity did not exist in Nigeria, explaining that multiple taxation only existed when two tiers of government were charging the same tax at the same time.

He stated that investigations under the Joint Tax Board (JTB) exposed fraudulent activities relating to tax and called on all stakeholders and tax payers to report all uncertainties regarding taxes to the FIRS.

Fowler also disclosed that the FIRS remitted N5.3 trillion to the federal government in 2018, with 55 percent coming from the non- oil sector. He commended the manufacturing sector for being major contributors and for paying taxes regularly.

 

ODINAKA ANUDU & GBEMI FAMINU

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