The Manufacturers Association of Nigeria has said that multiple taxation is exerting influence on the operations of manufacturers in the country and their participation in the African Continental Free Trade Area agreement.
This was disclosed by the Director General of MAN, Segun Ajayi-Kadir, at the closing of the 26th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria, with the theme: ‘Sustainable Tax Culture and Economic Roadmap for Nation Building’ on Thursday, according to Daily Trust.
According to Ajayi-Kadir, the increased taxation of internally generated revenue, i.e. IGRs, has resulted in higher tax burdens than expected, which has hurt the profitability and competitiveness of manufacturers.
He said, “Duplication of taxes increases production costs and final prices of goods and services, eroding profit margins and hindering investment incentives.
“MAN’s survey conducted in 2023 reveals numerous taxes with overlapping effects, adding complexity and burden to businesses. Sales tax and Value Added Tax (VAT), mobile advertising charges, education levies, tenement rates, land use charges, and parking fees contribute to financial burdens for manufacturers.
“Multiple taxation discourages investment, stifles entrepreneurship, and hampers economic growth, affecting SMIs disproportionately. The Nigerian manufacturers’ competitiveness in the global trading environment has declined due to the multitude of taxes. This tax burden may hinder the sector from maximising potential gains in the AfCFTA.”
Meanwhile, the Chief Executive Officer of Centre for the Promotion of Private Enterprise, Dr Muda Yusuf said that Nigeria’s manufacturers are burdened with an excessive level of operational costs.
Yusuf pointed out that the government needed to urgently address the issue of large energy costs, high logistics costs, supply chain problems, currency fluctuations, and exchange of customs duties to foster a more stable environment for businesses, particularly manufacturers.
The President of the CITN, Mr. Samuel Agbeluyi, lauded the federal government’s efforts to reform the tax system in Nigeria, adding that an effective tax system was essential to address the social challenges in this country.
He pointed out that the government needs to take into account the country’s economic situation before any tax policy is adopted.
Recall President Tinubu had set up a Committee On Fiscal Policy, and Tax Reforms chaired by former Fiscal Policy Partner and Africa Tax Leader at Taiwo Oyedele.
Oyedele said the Committee will transmit its policy recommendations to the National Assembly by the end of the third quarter of 2024.
