The Nigerian Communications Commission (NCC) has said taxation is a tool for economic development, saying taxation provides sustainable funding for social programs and public investments.
NCC added that taxation helps to distribute wealth in a fair and equitable manner.
NCC’s Executive Commissioner, Stakeholder Management, Mr. Adeleke Adewolu made this assertion at a regional workshop with the industry stakeholders in ibadan.
In a statement which explained the misconception that taxation is a punitive measure against thriving businesses. Instead, it emphasizes that taxation is a crucial component of public finance and plays a critical role in promoting sustainable and equitable growth.
The statement calls for support and recognition of the government’s efforts in using taxation as an instrument for socio-economic development. It recognizes the potential of Nigeria’s strong economic growth to benefit the entire West African region and identifies multiple taxation as a hindrance to realizing this potential.
“It also stated the importance of taxation as a tool for economic development and calls for efforts to address the issue of multiple taxation in Nigeria.
The statement highlights the negative impact of multiple taxation on economic development. It acknowledges that multiple taxation can reverse growth, stifle innovation, and discourage investment. It describes multiple taxation as scarecrows mounted by the government to disincentivize development.
It shows the references of the National Tax Policy 2017, which emphasizes the need to eradicate multiple taxation at all levels of government. It mentions the commitment of President Bola Ahmed Tinubu to address this issue and his signing of Executive Orders to curb arbitrary taxes. The statement also mentions the inauguration of the Committee on Fiscal Policy, Tax Reforms by the President, which aims to harmonize taxes and engage stakeholders to identify their concerns and pain points regarding tax and fiscal policies.
The statement provides a definition of multiple taxation as the imposition of the same or similar taxes on the same income, transaction, or person by one or more levels of government. It states that while some level of multiplicity is expected in a federal system of governance, levying the same tax on the same person or entity by multiple states or local government councils should be avoided.
It also emphasizes that multiple taxation does not lead to increased government revenue and instead makes profitable businesses unprofitable. It points out that it negatively affects the ease of doing business, shrinks the tax base, incentivizes tax evasion, and complicates tax compliance. It cites the World Bank’s view that taxing a specific tax base beyond a certain point can lead to declining tax revenues as businesses go out of business or evasion increases.
In addition,it highlights the administrative burden of complying with multiple taxes and how it hinders business competitiveness and weakens Nigeria’s economic foundations. It suggests that these incidents devalue the currency (Naira) and contract the country’s gross domestic product.
Overall, it highlights the challenges and negative consequences of multiple taxation on economic development in Nigeria and calls for measures to eradicate it and create a conducive environment for business and investment.
Here are the overarching principles of taxation mentioned in the statement :
1. Neutrality: Taxation should be neutral and equitable between different forms of business activities. It should not favor one form of business over another, ensuring optimal allocation of resources.
2. Efficiency: The tax system should minimize compliance costs for businesses and administration costs for governments, ensuring that the tax system operates with maximum efficiency.
3. Certainty and simplicity: Tax rules should be clear, simple, and easy to understand for taxpayers. This helps individuals and businesses understand their obligations and rights, leading to more informed decisions.
4. Effectiveness and fairness: Taxation should collect the right amount of tax at the right time, avoiding both double taxation and unintentional non-taxation. It should also minimize the potential for tax evasion and avoidance.
5. Flexibility: Taxation systems should be flexible and dynamic to adapt to technological and commercial developments. They should meet the current revenue needs of governments while being able to change as needed in the future.
The Federal Government expects all tiers of government to align with these fundamental principles of taxation. The Workshop aims to clarify misconceptions and promote a business-friendly environment by eradicating multiple taxes and creating a win-win situation for the public and private sectors in driving the national economy.
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