Operators in the Nigerian capital market have criticized the multiple tax system existing in the market and have canvassed for a global competitive tax rate for the country.
The operators who bear their minds at a day diagolue on the “Capital market & the 2015 Federal Budget” organ ised by the trio of Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria(AIHN) in Lagos said multiple tax system is a disincentive to companies operating in the country.
Speaking as a guest speaker at the occasion, Mr. Tola Mobolurin, who is also the Chairman of NASD Plc said “We should have a tax law that should be encouraging and non discriminating. It is really unfair to have multiple tax system because it does not encourage people to invest in the country. For example, in a situation, where a publicly quoted company pays tax when profit is declared and is also made to pay tax when it makes loss the following year is not a good tax system. So, the federal government should design a tax system that is globally competitive.”
He further stated that insurance companies should not be discriminated. In his words “ We should not discriminate against insurance companies. At the moment, government said insurance company cannot carry over loses as done in banks. Why should it be so? The rule should be reviewed because insurance is a big business.”
The Chairman of Association of Issuing Houses of Nigeria, Mr. Victor Ogiemwonyi, said “Double taxation is not good for the capital market. When a company is made to pay double taxes, then it would not attract more companies to the market. Government should encourage more companies to the market by giving tax waivers. For instance, pioneer status should be granted to companies.”
On the issue of budget, he sid that the government was able to reduce six per cent on recurrent expenditure and over 30 per cent on capital expenditure. He advised government to allow naira to find its level, saying that companies would manufacture locally to earn the dollar.
Comenting on the budget, Mobolurin, described the budget as tentative, saying that it does not align with the current situation as oil benchmark is still dropping. He said, “Frankly, Nigerians need to face the reality, we can’t afford the subsidy. “ Until it goes, we can’t find reasonable investment in refinery and other petrochemical industries. The real budget and work will commence after the elections. If we are not careful, in the next 20 years, the country will remain where it is because with the current situation, it can’t meet up the budget target.” According to him, Saudi Arabia will continue to drag down oil price and Shell, a major oil producer, has started laying off staff .
“The government too will retrench its staff , close some departments. We are going to have a situation where civil servants will not collect salaries for months.” He further stressed that as the naira depreciates, subsidy on fuel goes up. Naira is over N200 in the black market and it will find its realistic figure after the election.
On the way forward, he enjoined the government to reduce spending on legislators, advisers and retrain civil servants on different vocations for two years before laying them off.