April 17, 2024


3 min read

The Nigerian Communications Commission (NCC) has warned that multiple taxation was an impediment to the economy in the country.

Mr. Adeleke Adewolu, the Commission’s Executive Commissioner for Stakeholder Management, made the warning during a regional stakeholders’ workshop on multiple taxation and regulations in Ibadan, the Oyo state capital, attended by various stakeholders including representatives of state governments, experts, and telecommunication companies.

While speaking on the theme “Multiple Taxation: An impediment to Economic Development,” Adewolu explained that multiple taxation has continued to be a bane on economic development in the country, stating that the goal of the workshop was to address the problem associated with multiple taxation and find a solution.

He maintained that it is worth noting that the National Tax Policy of 2017 emphasizes the need to eliminate multiple taxation at all levels of government, adding that the policy states that taxes similar to those collected by one level of government should not be introduced by another level of government.

Adewolu went on to say that the paradox of multiple taxing is that it reduces the ease of conducting business, diminishes the tax base, incentivizes tax evasion, and complicates tax compliance.

According to him, “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.”

Adewolu stated that taxation is the backbone of public finance since it provides assured and sustainable sources of money for social programmes and public investments, while also serving as a tool curated by the government to effectively and efficiently share 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 has become cancerous to economic development.

“These type of taxes typically manifests 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 the government to disincentivize development.

“It is pertinent to note that the National Tax Policy 2017, emphasises 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 said.

He went on to say that the paradox of multiple taxation is that it does not increase government revenue and that the crippling effect of taxes is that it makes otherwise profitable businesses unprofitable, reduces the tax base, encourages tax evasion, and complicates tax compliance.

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