Taxation Is Critical For Making Economic Growth Sustainable, Equitable — NCC

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The Nigerian Communications Commission (NCC) has stated that taxation is critical for making growth sustainable and equitable, adding that is is an instrument design for economic development.

NCC’s  Executive Commissioner, Stakeholder Management, Mr Adeleke Adewolu, disclosed this while giving his keynote address at the Regional Stakeholders Workshop on Multiple Taxation and Regulations, titled: Multiple Taxation: An Impediment to Economic Development.

Part of the speech reads: “Despite the prospect of accelerated economic growth, the presence of multiple taxation, which the World Bank has termed ‘nuisance taxes’ has and continues to prove to be a bane on economic development in the Country. However, before addressing how multiple taxation is an impediment to economic development, it is important to emphasize that taxation, in and of itself, is a veritable tool for economic development.”

“The curious question, which this workshop will attempt to answer, is how a fiscal tool for economic development like taxation can become inimical to economic development. It is imperative therefore to correct some misconception about taxation, particularly the misguided notion of taxation as a penal tool on thriving business enterprise.”

“Taxation is the backbone for public finance. It provides guaranteed and sustainable sources of funding for social programs and public investments, it also serves as a tool curated by the government to effectively and efficiently distribute our commonwealth. It is thus evident that taxation is critical for making growth sustainable and equitable. Thus, taxation by design is an instrument for economic development and it is important to acknowledge and support the initiative of all tiers of Government in using taxation as an instrument for socio-economic development.”

“However, supporting the tax initiatives by the various tiers of Government includes indicating where a category of taxes have become cancerous to economic development. These type of taxes typically manifest themselves in the form of multiple taxation and by design, they reverse growth, stifle innovation and discourage investment. In parabolic terms, they are the scarecrows mounted by government to disincentivize development.”

Speaking on National Tax Policy 2017, he said: “It is pertinent to note that the National Tax Policy 2017 emphasizes the need to eradicate multiple taxation at all tiers of government. Specifically, the Policy states that taxes similar to those being collected by a level of Government should not be introduced by the same or another level of Government. The Federal, State and Local Governments shall ensure collaboration in harmonizing and eliminating multiple taxation”.

He also reiterated President Tinubu’s commitment to address vexed issue of multiple taxation.

“The President and Commander-in-Chief of the Federal Republic of Nigeria, His Excellency, President Bola Ahmed Tinubu, in his commitment to address the vexed issue of multiple taxation, recently signed a number of Executive Orders to curb arbitrary taxes in the Country. Also, the inauguration of the Committee on Fiscal Policy, Tax Reforms by the President, which is geared towards harmonizing taxes will provide an avenue to further engage various stakeholders in order to identify their pain points and critical concerns bothering tax and fiscal policies. This would also facilitate a conducive environment for conducive for local and foreign investment into the country.”

In simplifying what is multiple taxation is, he added: “According to the National Tax Policy 2017, Multiple Taxation is the imposition of the same or similar taxes on the same income base, transaction or person by one or more levels of Government, in one or more jurisdictions. While a level of multiplicity is expected in federal system of governance, the levying of a particular tax on the same person/entity, in respect of the same liability by more than one State or Local Government Council should be avoided.
The paradox of multiple taxation is that it does not lead to an increment in government revenue, rather the crippling effect of these taxes, is that it makes otherwise profitable businesses, unprofitable. It negatively impacts the ease of doing business, shrinks the tax base, incentivizes tax evasion and complicate tax compliance.”

 

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