By ERIC UGBOR
ABA — The MANUFACTURERS Association of Nigeria, MAN, has decried multiple taxation on businesses by governments in the South-East, saying the development was responsible for decline in the country’s manufacturing sector.
Vice Chairman of MAN in-charge of Imo and Abia states, Mr Ndubueze Anyanwu, told newsmen that MAN had scheduled a sensitization forum in Umuahia to study the situation.
He said the objective of the study was to strengthen the capacity of the private sector to contribute more meaningfully to policy making process and enhance the capacity of local, state and federal government officials to appreciate tax policies and their effects on businesses
Anyanwu explained that MAN had already conducted pilot phase of a study in Lagos, Ogun and Oyo states where it identified the need to extend the study to other geo-political zones of the country in order to have an across the nation comparative analysis of multiple taxation on businesses.
He said: “The growth of the Nigeria economy has over the years remarried stunted as a result of many negative factors, one of which is the challenge faced by businesses from uncoordinated tax administration that is referred to in common parlance as multiple taxation. This issue among others is responsible for the decline of the manufacturing sector.
“For instance, the sector’s contribution to the nation’s GDP declined significantly from 9.5% in 1975 to 6.65% in 1995, 3.42% in 2005 and with a marginal increase to 4.21% in 2010. Similarly, manufacturing capacity utilization declined rapidly from 70.1% in 1980 to 29.29% in 1995. 52.78% was recorded in 2005 but the figure declined to 46.44% in 2010.
“This scenario did not leave direct employment generation unaffected. A sample survey carried out by MAN through a random selection from over 2000 companies which spread across the ten sectors in MAN, showed that in 2001, 1,323,586 people were employed by the sampled companies. The number declined to 1,005,861 in 2006 and 966,395 in first half of 2010.
“The incidence of multiple taxation is reported to be on the increase from year to year. The exact number of taxes and levies collected from enterprises in Nigeria are not clearly defined as a result of the non-specificity of the number of taxes chargeable and the continuous introduction of new ones by the various tiers or government.”
He said currently, most businesses in Nigeria perceived the tax environment as unfriendly and a disincentive to businesses, since it increases the cost of doing business in Nigeria.
“In their quest to enforce tax compliance, revenue officials often employ unorthodox methods where they harass business concerns which most often disrupt industrial and economic activities. In some cases, company vehicles conveying products are impounded and are at times damaged in the process.
A lot of manufacturing and other businesses in Nigeria have shutdown production and in some cases have relocated their factories to places which are perceived to be more investment-friendly,” he added.
Anyanwu expressed hope that the outcome of the sensitization fora in the three states will go a long way in strengthening and sharpening MAN’s evidence-based advocacy on the challenges of multiple taxation in Nigeria.