By Franklin Alli & Adelola Adebayo
MANUFACTURERS Association of Nigeria(MAN), and the Center for International Private Enterprise (CIPE) Washington USA, are carrying out a nationwide tax survey in order to fast-track the passage of tax bills currently with the National Assembly into laws.
They have selected three States(Lagos, Ogun and Oyo) in the South-West geopolitical zone of the country for pilot test. The exercise will start September 28.
Director General, Mr. Jide Mike, who disclosed this to reporters in Lagos, Wednesday, said: “Though a number of Tax Reform Bills, aimed at reforming taxation matters, are currently before the National and some State Assemblies, it is believed that the outcome of this survey will enrich debate on such Bills whilst, at the same time fast-tracking the passage of these Bills into laws.
“This zone is a pilot zone selected in the first instance for the study. These States are major business hubs of the South West zone and have high level of industrial activities.The study will also extend to other zones in the course of the survey.”
The Director General explained that the project is aimed at strengthening the capacity of the private sector to contribute meaningfully to policy making process, to enhance the capacity of local, state and federal government officials to appreciate tax policies and their effect on businesses.
He noted that the incidence of multiple taxation is on the increase from year to year. “Although, the exact number of taxes and levies collected from enterprises in Nigeria are not clearly defined as a result of the nonspecificity of the number of taxes chargeable and the continuous introduction of new ones by the various tiers of government.
“Some researchers have however, estimated the number to be over 500. State and Local Government Councils have a greater part of these taxes and levies.”
He described multiple tax as a disincentive to businesses. “It engenders loss of man-hour to both the government and businesses and increases the cost of doing business in Nigeria.
The Nigerian economy has over the years, remained stunted as a result of many factors, one of which is the challenge faced by businesses through unco-ordinated tax administration leading to what is referred to, in common parlance, as multiple taxation.”
He said that this, among other factors, has resulted in the decline of the manufacturing sector.
“For instance, the sector’s contribution to the nation’s GDP declined “ significantly from 9.5 per cent in1975 to 6.65 per cent in 1995, 3.42 per cent in 2005 and with a marginal increase to 4.0 per cent in 2009. Similarly, manufacturing capacity utilisation dedined rapidly from 70.1 per cent in 1980 to 29.29 per cent in 1995, fluctuating to 52.78 per cent in 2005 and with eventual decline to 4.7 per cent in 2009.”
A sample survey carried out by MAN on about 300 manufacturing companies showed that in 2001, 2,752,832. people were employed by the sampled companies. The number declined to 1,043,982 in 2005 and 1,026,305 in 2008.